The oya utomobile l asania imited Annual Report - RACT RACT... · The oya utomobile l asania imited...

The Royal Automobile Club of Tasmania Limited Annual Report

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Branches

Launceston

Cnr York & George Sts

(03) 6335 5633

Devonport 119 Rooke St Mall

(03) 6421 1933

Burnie

24 North Terrace

(03) 6434 2933

Rosny Park

Rosny Mall,

2 Bayfield St

(03) 6244 7755

Glenorchy

Cnr Main Rd

& Terry St

(03) 6273 1888

Kingston

Shop 49A

Channel Court

(03) 6229 8299

RACT Annual Report 07–08 1

2007 08

Patron

His Excellency, The Honourable P.G. Underwood AO

Governor of Tasmania

President

Ted Best AM (to 30/10/2007)

Roger Locke (from 30/10/2007)

Vice Presidents

Stuart Slade

Peter Joyce (from 01/02/2008)

Board

Josephine Archer

Ted Best AM

John Bloomfield (to 30/10/2007)

David Catchpole

Bruce Clark (from 26/03/2008)

Peter Dixon (from 31/07/2007)

Robin Holmes

Chris Langdon

Tony Stacey AM

Kathryn Westwood

Honorary Life Members

David Catchpole

Trevor Challen, OAM

Denis Nation

Clive Sherry

Tony Stacey AM

Jean Trethewey OAM

Regional Advisory Committees

North: Peter Dixon (Chairman); Josephine Archer; Ron Bessell;

Bruce Doolan; Alana Fazackerley; Kerry Holloway; Colin Moore;

Gary O’Keefe; Robert Panitzki; Russell Reid; Craig Petterwood

(Secretary).

North West: Bill Enkelaar (Chairman); John Bloomfield; Bruce

Clark; Ian Day; Kay Kidd; Rodney Medwin; Dale Prosser; Joe

Rattray; Robert Sharp (from 27/11/2007); Michael Dixon

(Secretary).

South: Stuart Slade (Chairman); Ian Holloway ESM; Phillip

Jones; Bill Lawson AM; Jim Nicholson; Neil Noye AM; Betty

Parssey; David Paton APM; Vince Taskunas (Secretary).

Registered Head Office

Cnr Murray and Patrick Streets,

Hobart, Tasmania, 7000

Postal Address

GPO Box 1292, Hobart, Tasmania, 7001

Contact Details

Telephone: (03) 6232 6300

Facsimile: (03) 6234 8784

Email address: [email protected]

Internet site: www.ract.com.au

Branches

Hobart (Murray Street); Hobart (Collins Street);

Launceston; Devonport; Ulverstone, Burnie;

Rosny Park; Glenorchy; Kingston.

Solicitors

Butler McIntyre and Butler

20 Murray Street


Auditors

Wise Lord & Ferguson

160 Collins Street


Bankers

ANZ Banking Group Limited

40 Elizabeth Mall


Senior Management

Group Chief Executive: Greg Goodman

Chief Operating Officer: Harvey Lennon

Chief Financial Officer: Judith Dew

Chief Information Officer: Iain Kelly

General Manager, Sales & Distribution: Craig Petterwood

General Manager, Public Policy and Communications:

Vince Taskunas

General Manager, Roadside and Technical Services:

Darren Moody

General Manager, Travel: Robyn Sinfield

Human Resources/Compliance Manager: Lyndell Shephard

Contents

President’s Report 2

Group Chief

Executive’s Report 4

The Year in Detail 7

Directors’ Report 16

Auditor’s Independence

Declaration 20

Statement of Financial

Performance 21

Statement of Financial

Position 22

Statement of Changes

in Equity 23

Cash Flow Statement 24

Notes To and Forming

Part of the Financial

Statements 25

Directors’ Declaration 55

Independent

Auditor’s Report 56

RACT Annual Report 07–082

President’s Report

The RACT is the largest and strongest community service

organisation in Tasmania and I was very proud to take on the

position of President, following in the footsteps of my Board

colleague, Ted Best AM, who stepped down from the role

this year.

As a long serving member of the Board, I have seen the steady

growth of the RACT over the last decade in good economic

climates and bad. This year, a period of strong global economic

growth has been tested by a waning US economy that in part

has led to poor investment returns. Despite this, the RACT has

enjoyed a financially strong 2007/2008 and ends the year in

a sound position.

The success of a service organisation, of course, depends

almost entirely on its commitment to service and the efforts

of management and staff in this direction during the year have

played a most significant role in the RACT’s year-end outcome,

despite the adverse economic conditions.

The RACT maintains constant audits of its service levels and

this year saw exceptional outcomes. Good service translates

into high levels of loyalty and this was amply illustrated with

three 50-year membership functions, in Hobart, Burnie and

Launceston. The Hobart function was the largest with some

230 Tasmanians coming together to celebrate 50 years as

members of the RACT. Amongst those who had attained

50-year membership status was former President of the

Legislative Council, Ken Lowrie; a former President of the

RACT, Clive Sherry; the former CEO of the RACT, Denis Nation;

and the ABC’s Ken Short.

At Board level, this year saw a number of developments that

deserve mention.

John Bloomfield retired after a very active life of contribution

to the RACT’s Board and was replaced by another North West

Coaster, retired businessman Bruce Clark. The RACT’s thanks

go to John for his tremendous commitment to the RACT

and its ideals.

During the year, Peter Dixon was appointed to a casual vacancy

on the Board following the resignation of long serving Director,

Bruce Doolan. Mr Dixon, of Launceston, is Associate Dean,

(Teaching & Learning) and Lecturer in Management within

the Faculty of Business at the University of Tasmania.

His extensive legal and business background complements and

enhances the professional skills that are currently represented

on the Board. Mr Doolan served on the Board of the RACT

for 17 years and I wish to record here my appreciation of his

counsel and experience.

During the year, the RACT worked closely with Australia’s

other motoring clubs and through the Australian Automobile

Association (AAA) to advance the agenda on behalf of our

motoring constituency.

The Federal Election of 2007 highlighted growing concern about

climate change and, in the lead up to the election, and following

it, this was a major issue for the motoring clubs. As a group

representing 6.5 million motorists, we decided to develop

a national policy on greener motoring.

We recognised that the climate change challenge requires all

sectors of the community to play their part in reducing emissions

and the motor clubs’ policy, which was finally adopted, took into

account the impact of motoring on emissions while also ensuring

Our cover:

Three sides of the RACT cube

reflect the three strands of

our services to members

and customers –

ROADSIDE assistance,

travel and insurance.

Representing their business units are

Helen Coleman (RACT Travelworld);

Josh Dobie (ROADSIDE patroller)

and Jennifer Mackeprang

(RACT Insurance).

The success of a service organisation, of course, depends

almost entirely on its commitment to service and the efforts

of management and staff in this direction during the year have

played a most significant role in the RACT’s year-end outcome,

despite the adverse economic conditions.“ ”


2007 08

maximum mobility was maintained and that motorists were also

educated to environmentally friendlier ways of driving.

The policy was launched in Canberra and a national climate

change summit was held in June, which I attended on behalf

of the RACT. As part of our position on climate change, the

clubs supported the introduction of emissions trading which

would see motorists reducing their vehicle emissions through a

market-based carbon-trading scheme. We were opposed to a

government tax regime and were very pleased when the new

Rudd Government announced it would proceed with a market-

based trading scheme.

The relationship between the RACT and other motoring clubs

has been growing steadily stronger in recent years and climate

change was a particular issue where we worked very closely

together and with the AAA to ensure the best outcome for

our members. The AAA is the motoring clubs’ secretariat in

Canberra and is funded by all the motoring clubs. Currently,

the President of the AAA is Alan Evans, a former Tasmanian,

while the Chief Executive is another Tasmanian, Mike Harris,

whose late father, Mr Lin Harris, was a board member of the

RACT for nine years.

As well as its focus on national issues, the RACT continued to

work closely this year with the Tasmanian Government. Regular

meetings are held at CEO level and at senior managerial level,

between the RACT and DIER, to discuss issues of concern such

as infrastructure funding and road safety.

The RACT also maintains membership of the state committee

that advises the Federal Government on its Black Spot

funding program and the RACT is represented on the State

Government’s peak Road Safety Council and the Road Safety

Task Force.

Within the three regions of Tasmania, the RACT also maintains

advisory committees that offer input on important local road

funding and road safety issues which can then form part of the

RACT’s extensive consultative and communications programs.

Through this commitment to liaison, consultation and

communications, the RACT enjoys a strong reputation

as an independent authority and voice of its members.

My thanks go to our many partners such as our agents,

contractors and our three regional advisory committees.

Their enthusiasm for the RACT and their support of its values

helps make the organisation the respected household name

it is today.

Finally, I wish to acknowledge the hard work of the RACT Board

in its guidance and oversight of the RACT, the Executive team

led by Greg Goodman, and all the staff at the RACT for the result

we have enjoyed this year.

Roger Locke

Three eras of RACT service took

the stage at our 50-year

membership function at

Wrest Point earlier in the year.

Across Tasmania, we honoured

almost 500 loyal members for their

half-century of membership of

the Club.

Southern Regional Committee

The RACT’s Regional Advisory Committees meet regularly to discuss and recommend action on their region’s road safety and road infrastructure issues. Pictured is our Southern Regional Advisory Committee: Front, from left: Ian Holloway, Betty Parssey, RACT Vice-President Stuart Slade (Chairman), Philip Jones. Back: RACT General Manager Public Policy and Communications Vince Taskunas (Secretary), David Paton APM, Jim Nicholson, Neil Noye AM, Bill Lawson AM.


Group Chief Executive’s Report

This financial year will be remembered as the year the

international economy ‘caught the flu’. The US sub-prime

mortgage crisis triggered a decline in confidence in most

developed economies, a tightening in the investment climate

and poor returns on investments.

Despite these global uncertainties, the RACT has enjoyed a

good year, achieving an operating surplus of $1.4 million.

As the President has reflected, much of this can be attributed

to our hard working staff who, this year, provided the highest

levels of measured customer service since I have been CEO.

This has been reflected not just in customer satisfaction rates but

also in membership growth. During the year, RACT ROADSIDE

membership grew by 2.2% which is a most commendable

result and reflects on the value which Tasmanians place in the

RACT and its services at a time when consumers are tightening

their belts.

Our membership growth included a healthy 8.7% increase in

our premium Ultimate membership which again demonstrates

the value that Tasmanians place on this cover.

Our three core activities are ROADSIDE Assistance, Insurance

and Travel and, besides the solid growth path in membership

at the RACT, I am pleased to be able to look back on a year

of growth in both Travel and Insurance.

RACT Insurance experienced an increase in gross written

premium. Its market share continued to build, consolidating

its position as the leading insurer in Tasmania in motor and

home insurance.

The result came in a year that saw, once again, some major

weather events. A storm in April, described as ‘hurricane-like’,

caused very extensive damage in southern Tasmania. RACT

Insurance received 1300 claims for damage totalling just over

$2 million. This eclipsed its previous record of

$1.75 million in claims due to storms in February 2005.

Because RACT Insurance is local, with local expertise and

local management, it was able to respond to April’s storm very

effectively and enhanced its reputation in the community by the

way it expeditiously handled the flood of claims that occurred

after the storm.

RACT Travelworld achieved an increase in revenues this year.

In line with our strategic planning, with an emphasis on

international travel and holidays, 72% of sales at RACT Travelworld

were for overseas travel, compared to 28% for domestic travel.

The travel business has been working hard on its structure and

business offering and this groundwork is now being reflected in

the bottom line.

It has also been a year that has seen major investment in

business so that we can better serve our members.

Highlights include:

• $350,000spentonupgradingbranchesatRosny,Kingston

and Ulverstone

• Thepurchaseoftwonewtowtrucks($160,000)

• $200,000todateonanewcomputeraideddespatch

(CAD) system to be fully implemented by November 2008.

The RACT also upgraded its ROADSIDE patrol fleet.

Two patrol vans were replaced with diesel vehicles, to

support the RACT’s policy of reducing its greenhouse footprint.

On the technology front, we introduced an SMS messaging

service for ROADSIDE and RACT Insurance users to remind

them when membership and policies were about to expire.

A highlight during the year was the

opening of our new Rosny branch,

further proof of our belief that a

strong and responsive statewide

branch network is an important

feature of RACT’s service to our

members.

Because RACT Insurance is local, with local expertise and local

management, it was able to respond to April’s storm very effectively

and enhanced its reputation in the community by the way it

expeditiously handled the flood of claims that occurred after

the storm.“ ”


2007 08

His retirement ushered in a minor restructuring of senior

management roles. Mr Vince Taskunas was appointed to

the new position of General Manager, Public Policy and

Communications, and Darren Moody, who had served under Mr

Ling, became General Manager, Roadside & Technical Services.

Both these positions strengthen our efforts in our

communications. The year again saw the RACT heavily involved

in initiatives, and comment, on issues affecting road safety,

motoring in general, and transport infrastructure.

The three biggest issues, among many, this year were

undoubtedly petrol prices, climate change, and federal funding

for Tasmanian transport infrastructure.

A new oil shock took petrol prices to as high as $1.60 per litre

by the end of the financial year. The RACT maintained its weekly

monitoring of petrol prices in Tasmania and posted the results

each Thursday on its website. I also gave evidence to an inquiry

into petrol prices by the Australian Competition and Consumer

Commission. Our own strategy throughout this period of soaring

petrol prices has been to encourage the maximum amount

of local competition in prices and provide transparency so

that motorists can make a choice when it comes to

purchasing petrol.

During the year, climate change emerged as a key Federal

Election issue. The motoring clubs were determined to take

a leadership stance on this fast-developing issue for three

reasons: to ensure motorists weren’t unfairly penalised by any

emissions trading scheme; to ensure that each club played its

part to minimise its environmental footprint; and to put in place

awareness and educational programs to help motorists reduce

their own carbon footprint.

RACT Travelworld again

increased its international business

during the year, using our bi-monthly

magazine Motor News as a key

promotional tool.

From the deserts of Rajasthan to the palm-fringed beaches of Kerala; from simple rural villages to sophisticated modern

cities – India is a country of diversity and contrast. This shows in the people and their languages, cultures, religions and lifestyles and it’s seen in the rich history of 5000 years of civilisation, marked by waves of conquests and the rise and fall of mighty empires.

India is confronting – but it’s an experience for all the senses, with an ever-present barrage of unusual scenes and unpredictable experiences.

My journey back to India begins in Delhi – a city of glittering gems, ancient monuments, magnificent museums and a fascinating culture. I wander through the Red Fort, a phenomenal testament to the once mighty Mughals and visit Humayum’s Tomb, built in the 16th century. I’m amazed at the sheer scale of the majestic Jama Masjid, India’s largest mosque, where 25,000 people worship. My home is the Imperial Hotel, which has hosted royalty, supermodels and pop stars – and now me! It’s seriously sumptuous, with French linen, fluffy pillows, deep marble baths and classic furniture from the 1930s.

India has two iconic destinations – the Taj Mahal in Agra and the Floating Palace in Udaipur – my travels include them both.

Agra is lively and busy, with a marvellously chaotic marketplace – but it’s the city’s sublime architectural masterpiece that is the highlight. Completed in 1653, the Taj Mahal looks as immaculate today as it would have done more than 350 years ago. My room at Oberoi Amar Villas looks directly across to the magnificent monument to love and because I’m so close, I visit at sunset and sunrise. The uncrowded early morning is the best – the air is cool and the morning light spreads across the Taj, turning it from dark purple to pale blue and finally to a glow of gold.

India’s second icon, Udaipur’s Floating Palace, is in the state of Rajasthan. As I arrive, the streets of the city are bright with multi-coloured saris fluttering in the breeze and colourful turbans signifying different castes. Our coach trip is interrupted by a marriage – songs, dancing and celebrations in which we were invited to join!

Udaipur, the Venice of the East, is a seductive city, with Lake Pichola lapping against shimmering white buildings and the profile of the Aravalli Hills in the distance. My island home is the famous Lake Palace Hotel, an idyllic marble edifice that occupies

the entire island and appears to float. Formerly the royal summer palace, it has shady courtyards, lotus ponds and a pool shaded by an ancient mango tree. Remember Roger Moore in the James Bond movie Octopussy? This is where he played! My room is a dream – a Royal Suite overlooking the lake with carved wooden furniture and hung with silk.

My next destination is the dynamic city of Mumbai, a frantic powerhouse of fashion, films and finance. Bollywood has poverty and opulence, slums and swish restaurants, ancient bazaars and colonial-era relics. Fifteen million people call Mumbai home – no wonder the traffic is at best, tiresome – but the city is alive and flourishing. My hotel, the Oberoi, is on ‘The Queen’s Necklace’, a popular promenade and just the place to watch the sunset on the Arabian Sea. I also visit the magnificent Taj Mahal Palace & Towers Hotel, a fairytale blend of Islamic and Renaissance architecture.

There’s a dramatic contrast between the bustling city of Mumbai and the pace of life in the state of Kerala, a two-hour flight south with JetAirways. This is where India slips back into the slow lane – spindly networks of rivers, canals and lagoons nourish endless rice paddies and coconut groves and houseboats cruise the waterways. I stay in the unhurried backwater town of Kumarakom on Vembanad Lake. The meandering pool at Kumarakom Lake Resort is 250 metres long – it snakes its way around the eastern part of the hotel and we have private access to the pool from our alcove.

My final Indian destination is Kovalam Beach, where I spend three wonderful nights at the Leela, a delightful cliff-top resort overlooking the Arabian Sea – it’s a fine way to conclude an unforgettable visit to incredible, inspiring India.

Inspired by India

Robyn Sinfield

India is confronting – but it’s an

experience for all the senses,

with an ever-present barrage

of unusual scenes and

unpredictable experiences.

August / September 0836 37August / September 08

We are very cautious about using such technology in a way

which may be intrusive, but the feedback we have received

has been excellent.

Free winter car safety checks were again undertaken in Hobart

and Launceston as a community service, underlining our

commitment to supporting Tasmanians. As I report each year,

the RACT was again very active in sponsorship of community

undertakings and events right across the State in 2007/2008.

The free winter car checks were a major undertaking by the Club,

but they illustrate our active engagement in the community.

As well, we supported many events and programs around the

state in response to approaches from organisations seeking

our assistance.

Our commitment to working in the community extends to our

branch network. The nine branch offices the RACT maintains

around the State provide a convenient walk-in facility for people

to transact business with the RACT, if they prefer face-to-face

dealings, rather than transacting business by the phone or

the internet.

The branch offices give the RACT a very visible profile in local

communities. It is worth noting that some of our senior managers

are also located in centres outside Hobart, and bring to the

organization a truly statewide perspective. Robyn Sinfield, who

heads RACT Travelworld is headquartered in Ulverstone, and

Craig Petterwood, our General Manager Sales & Distribution,

is located in Launceston.

I should record at this point some senior changes at the RACT

over the course of the year. Our long serving Chief Engineer, Doug

Ling, retired from the RACT after many years of distinguished

service to both our club and the motoring community of Tasmania.

Mr Ling left the RACT with our thanks for his fine work, and our

best wishes for the future.

The RACT Insurance team responded promptly and effectively in the aftermath of April’s damaging storms, handling a flood of more than 1300 claims.


Group Chief Executive’s Report

This plan came together through intensive consultation

and liaison among the clubs at numerous meetings.

The RACT also enjoyed a successful year in lobbying for

transport infrastructure funds for Tasmania in the lead up to the

Federal Election. We liaised closely with the State Government,

the federal Liberals and the federal ALP, and both major parties

committed to Tasmanian projects in line with the priorities we

had outlined to them.

So at the end of the year, in an economic climate which is more

uncertain than for many years, the RACT remains a strongly

RACT continued to focus our

advocacy efforts on motoring and

road safety issues affecting our

members, particularly the problem

of fast-rising petrol prices.

performing Tasmanian entity. Its financial position is robust,

it enjoys a strong asset base, and its staff are reaching new

peaks of professionalism in membership services.

My thanks to RACT staff – and our wider family, such as

our ROADSIDE agents, Approved Repairers and Selected

Insurance Repairers, for their commitment to the RACT

and its values over the last 12 months.

Greg Goodman

RACT Chairman Roger Locke presents Burnie member Alan Braid with a plaque acknowledging his 50 years of RACT membership.


2007 08The Year in Detail

Corporate GovernanceThe Board of the RACT is responsible for the management and

control of the affairs of the organisation in accordance with the

Club’s Constitution, statutory and compliance obligations.

In particular, the Board:

• Promotesethicalandresponsibledecision-making;

• Ensurescompliancewithlaws,regulationsandall

appropriate accounting standards;

• Reviewsthestrategicdirectionandapprovestheannual

operating budget;

• Monitorstheoperatingandfinancialperformanceofthe

RACT Group;

• Approvesandmonitorsmajorcapitalexpenditureprograms;

• Ensuresaclearrelationshipbetweenperformanceand

executive remuneration;

• Monitorsriskmanagement;

• Ensuresthatthemembersarefullyinformedofmaterial

developments.

In the year there was ongoing scrutiny of our processes and

procedures by the Club’s outsourced Internal Auditor and the

Board again subjected itself to a performance review to ensure

its responsibilities were being carried out in the best possible

manner. An extensive system of documented and controlled

policies and procedures is in place throughout RACT including

risk management and business continuity.

The Club’s governing body held 11 formal meetings in the

year and meetings were held in all three regions of the State.

The Committees which report to the Board held a total of

16 meetings.

The following Committees of the Board have clear operating

Charters and report to the Board on a regular basis:

• AuditandRiskManagement

• Investment

• RoadandTraffic

In July 2007, the Board welcomed Peter Dixon, of Launceston,

to fill a casual vacancy caused by the resignation of fellow

Launcestonian, Bruce Doolan, in June 2007. Peter has

extensive legal and business experience and is a strong

contributor to the Board’s deliberations. In February 2008,

Peter was appointed Chairman of the RACT’s Launceston-based

Northern Regional Advisory Committee.

John Bloomfield, of Ulverstone, retired from the Board in

October 2007 after eight years of dedicated service. The Board

wishes to place on record its appreciation of his contribution to

the affairs of the Club during his term of office. Mr Bloomfield

will continue his RACT association through his membership of

the North West Regional Advisory Committee.

Celebrating 50 years of RACT

membership at our function in

August 2007 were long-serving

Chief Executive Denis Nation and

Mrs Jeannette Nation, with the

then-President, Ted Best AM.Looking back over the year, our club magazine Motor News has published numerous new vehicle reviews and road tests, including extensive coverage of the prestigious Australia’s Best Cars awards.


Bruce Clark, of Burnie, was appointed to the Board in March

2008 to fill the casual vacancy caused by the retirement of

John Bloomfield. Mr Clark has a strong background in the retail

industry, having been Managing Director of a family business

operating in Burnie for 61 years until the sale of the business in

2007. He is keen to ensure that the interests of the North West

Coast continue to be well represented at a State level.

In October 2007, Honorary Life Membership of the RACT

was awarded to former Director and Past President, Jean

Trethewey, OAM and current Directors (and past Presidents),

David Catchpole and Tony Stacey, AM, in recognition of their

significant contribution to the Club over a combined total of

51 years.

We were delighted to learn that Director, Tony Stacey, AM,

was recognised in the Queen’s Birthday Honours in June

2008 for his service to the footwear manufacturing industry

and to the community through executive roles with a range

of arts, motoring and service groups. This is indeed a most

distinguished award and one that is richly deserved.

With sadness, we record the passing in May 2008 of Honorary

Life Member and former RACT President, Hugh Loane, OBE.

Hugh was a genuine and enthusiastic supporter of the Club for

over 25 years and actively represented the interests of motorists

on the North West Coast. He was highly regarded by all who

knew him.

ROADSIDE AssistanceIn the year under review, 19 RACT ROADSIDE corporate

patrols and 62 metropolitan and country contractors attended

77,967 calls for assistance, which was nearly 1% more than

for the previous year. Corporate ROADSIDE patrols attended

in excess of 44,500 calls in metropolitan areas. They were

able to mobilise over 90% of these breakdowns on the spot.

Metropolitan Agents attended almost 14,000 jobs for members

with the remaining 19,500 jobs undertaken by the Country

Agent network.

On average, each call was attended within 28.1 minutes from

actual receipt of the request for assistance. Our Assistance

Centre handled over 106,000 inbound phone calls with an

average 76.1% answered within 30 seconds.

During the year, two ROADSIDE patrol vans were replaced with

diesel vehicles in line with RACT’s environment policy in reducing

our greenhouse footprint. Two new tow trucks were provided for

contracted towing services in the Hobart metropolitan area

to improve member service levels and maintain continuity

of service.

ROADSIDE MembershipThe total number of personal ROADSIDE memberships grew

by 2,318 in 2007/2008 representing an increase of 2.2%.

There are now 108,918 personal members. Total membership

including commercial arrangements and relationship

memberships stands at 186,426.

ROADSIDE ULTIMATE membership has again proved very

popular with Tasmanians because of the comprehensive cover

provided. Membership of this premium product increased by

8.7% in the year and at the end of June 2008 the number

of ROADSIDE ULTIMATE members stood at 41,056.

More than 50% of all new members who joined throughout

the year chose ROADSIDE ULTIMATE.

More members than ever took advantage of the discounts

available through the ROADSIDE group pricing options.

47% of members are part of a membership group. With the

group pricing option, friends and family can now join into one

group and save on the annual subscription. The more members

in the group the greater the saving.

Another feature of the group pricing option is the ability to spread

the cost over the year via the direct debit system. Members

can choose to pay monthly, quarterly, half-yearly or annually

depending on the number in the group. There is no extra charge

for paying by direct debit and members can rest assured that

their ROADSIDE cover will never unintentionally lapse.

TravelRACT Travelworld continued its growth in 2007/2008

achieving a 2.3% increase in revenues over the previous year.

Once again, the year under review saw a reduction in

commission received from suppliers and, in some cases,

this commission was reduced to zero. Therefore, our fees for

service were reviewed to help offset the loss of commissions.

The Year in Detail

At our 2007 Annual General Meeting

in November last year, three past-

presidents were awarded honorary

life membership of the club:

(from left) David Catchpole, Jean

Trethewey OAM and Tony Stacey.

Winners of our Win a Mazda competition, Summerhill’s Joan and Nigel Strange (left and right) were presented with their new car by John McKenna of Mazda Launceston and RACT’s Launceston Team Leader Lynne MacCrosty.


2007 08

RACT Travelworld’s business ratio for the year was 72%

international sales and 28% domestic sales. We are one of the

few retail travel agencies in Victoria/Tasmania that has not ‘lost’

domestic sales – instead, holding our own with a vital part of

our business.

The year has been one of concentrating on ways to better

market to our clients / members. Very successful bi-monthly

information sessions were held across the state featuring nights

in Hobart, Launceston and Ulverstone to cover our nine office

locations. These sessions were well received by our guests and

subsequent bookings following each event have been strong.

The Northern Territory Muster in February and Cruise Holidays in

June were two of the largest attended events in our calendar.

RACT Travelworld has participated in strategic marketing forums

on a quarterly basis with constituent organisations RACQ,

RAASA and RACWA. With this relationship we are marketing

exclusive value-added opportunities that are not available

via other retail travel agency outlets. RACT Travelworld’s

relationship with JTG (Jetset Travelworld Group) has been

enhanced and many opportunities were delivered such as

the online booking engine.

RACT Travelworld has been productive in representing the

interests of Tasmanian travellers on a wide range of industry

issues, being the advocate as Tasmania’s largest retail travel

agency group. News releases and updates are regularly sent

to Tasmania’s media and we entered into a partnership with

TAFE Tasmania working with the Drysdale Institute for Travel

and Tourism sponsoring three Travel Scholarships for local

Tourism students.

InsuranceIt has been a successful year for RACT Insurance in terms

of both financial and staff performance, illustrated by a 6.3%

increase in Gross Written Premium. RACT Insurance has,

once again, increased its market share in Tasmania and remains

number one in the market for both Home and Motor insurance.

This excellent outcome has been achieved through the provision

of first-rate products and services that meet the needs of our

customers.

2007/2008 was an eventful year with a continuation of

catastrophic storms in August and again, in April, when

conditions were described as hurricane-like. At the same time,

there were a significant number of individual house fires.

The insurance staff, contracted external assessors, repairers

and suppliers continued to respond promptly and with empathy

for all of the affected customers.

It was again pleasing to see service level targets exceeded

over the entire year despite increased numbers of claims.

Our customer satisfaction surveys have also been retained at

the nine out of ten level during the year reflecting our vision to

set the benchmark in terms of products and services for our

customers. RACT Insurance continues to make a real difference

in the community by helping our customers when they need

it most.

RACT Insurance has also continued to support the work

of local charities through staff allocated (paid) volunteer days.

In 2007/2008, staff voluntary work totalled more than

60 days for the community. Charities supported included

Headway rebuilding lives, RSPCA and the Cancer Council.

In 2007/2008, RACT Insurance staff were also very excited

about supporting emerging young artists in the community

through the RACT Insurance Tasmanian Youth Portraiture Prize,

which was organised in conjunction with Tasmanian Regional

Arts and Clemenger Tasmania. This event was so successful

that it is now agreed that it will continue for at least a further

three years. It has also been nominated for two national awards

with the Australian Business Arts Foundation.

RACT Insurance continues to support the U-Turn program

assisting Tasmanian youth by regularly donating damaged

vehicles. These vehicles are repaired and then donated back

to victims of car theft.

Branch NetworkThe nine branch offices around the State, together with

the Club’s Customer Service Centre, continue to provide

ease of access and professional service to our clients.

Young Tasmanian artist Hilton Owen was the inaugural winner

of the RACT Insurance Tasmanian Youth Portraiture Prize. The award

has already been an important boost to Hilton’s future career as a

professional artist.

In April this year, three high-achieving Drysdale College students were awarded the inaugural RACT Travelworld Scholarship, a prize that will open doors into a dynamic industry. (Left to right) winners Persia Brooks, Nicholas Denny and Susan Hurst, with RACT Travelworld’s Elizabeth Roberts and Robyn Sinfield.


Our branch network has had a very successful year with all

branch locations performing well and receiving strong support

from clients who prefer to deal with their local branch. Branch

staff continued to provide valuable support to the Club’s

Customer Service Centre by logging into the telephone system

to cover periods of high demand. Further improvements to our

systems are providing increased flexibility for our sales staff

to transact business and interact with clients online, creating

an additional method of contact with sales staff when it is not

convenient to travel to a branch.

The commitment to the Club’s branch network has continued

during the year with the relocation of the Kingston branch to an

upgraded office within the Channel Court Shopping Centre, a

major refurbishment of the Launceston branch and the relocation

of the Rosny branch to a new and larger office next door to

our old branch in the Rosny Mall. Our Travelworld branch at

Ulverstone also received a major upgrade earlier in the year.

We are very proud of these new locations and refurbished offices

and are confident members will benefit from - and enjoy - these

upgraded facilities. With the recent completion of the new Rosny

branch a full upgrade of our branch network has almost concluded

with only the Hobart, Travelworld Collins Street and Burnie

branches not receiving a major upgrade over the last two years.

Plans are in place to upgrade these offices in the near future.

We are very pleased with the continued support provided to our

branch network and look forward to the opportunities that the

new look branch network will provide to clients.

FinanceThe Club’s existing finance arrangements for personal loans

with our sister club, RACV, and home loans with the ANZ Bank

continue to provide highly competitive rates and conditions for

members.

RACT home loans offer considerable savings on fees and

interest rates with attractive conditions. Our personal loans

offer some of the best interest rates available with further

discounts for ROADSIDE ADVANTAGE and ROADSIDE ULTIMATE

members.

Our personal loan product is designed to be extremely customer

friendly and easy to access, with a fast approval process.

All loan applications are undertaken by telephone and loan

sign-ups are completed in our branches or via mail if this is

more convenient for the customer.

We are confident that RACT Finance provides high quality

and competitive rates for our members seeking a home

or personal loan.

Human ResourcesThe RACT is committed to ensuring that it provides an

environment where staff will say ‘this is a great place to work’.

The 2007/2008 Employee Feedback Survey confirmed that

progress had been made with an overall satisfaction rate of

78.95% compared to 74.16% in 2005/2006.

A key ‘people’ initiative developed in the year was the

‘CARE Program’, which provides an opportunity for all RACT

employees to have a one-on-one meeting with their ‘manager

once removed’. The focus of this meeting is on career

aspirations and development opportunities and the feedback

from both employees and managers is that the process has

had some very positive outcomes.

2007/2008 saw the launch of a bi-monthly employee

newsletter, ‘inteRACTion’, which is a forum for all staff to be

kept informed of activities throughout the RACT network

including health and safety, training, employee recognition

and social events.

Occupational Health and Safety is a key issue for the business

and to reinforce our commitment to ensuring the safety of

our employees and our customers, an external provider

was appointed to undertake an Occupational Health and

Safety Management Systems Gap Analysis. This process

acknowledged good practices that are already in place and

identified opportunities to take our safety management to a

higher level. Going forward, these actions will help form part

of the Club’s Annual Occupational Health and Safety Plan.

RACT staff are involved in many areas of the business including

Occupational Health and Safety and Employee Consultative

Committees. Members of these committees are actively

empowered to contribute to improved systems and processes

that will benefit both our employees and our customers.

The Year in Detail

Printers Steve Kitanovic and Roger

Rigon check proofs of our magazine

Motor News. Early next year we will

offer members the opportunity to

read the magazine in electronic form

via our website, rather than receiving

it as a printed copy by mail.

At the inaugural Patrol Skill Showcase in Canberra, the RACT’s Josh Dobie (centre) competed against patrollers from other clubs, winning the category for Best Practice in Customer Service.


2007 08

Technical ServicesTechnical Services continued to provide high quality vehicle

inspections on behalf of members and used car dealers.

Technical Advice remains a highly used and valuable service for

members on a wide range of matters including advice on vehicle

purchase, operation and maintenance. Technical Services

provided a significant research report on vehicle operating costs

on 60 popular vehicles during the course of the year.

Technical Services in Hobart continued pre-auction vehicle

appraisal inspections for ex-Government vehicles being sold

through Pickles Auctions. As these vehicles are unregistered

at the time of sale, a roadworthy certificate is also included in

the inspection. The respected reputation of the RACT in the

community has given buyers peace of mind that the vehicle

they are bidding for has been checked by RACT and is ready

to be registered.

Winter car safety checks were undertaken in Hobart and

Launceston as a community service. These checks highlighted

various safety and maintenance related issues for members and

the general community.

Child RestraintsRACT Technical Services continues to be recognised as the

foremost expert in the correct fitting of child restraints in

Tasmania to suit individual vehicle and member needs. The

RACT Child Restraint Advisory and Fitting Service sold in excess

of 500 child restraints and provided valuable advice and fitting

services to RACT members and customers. There was also

an increase in demand for the short-term Child Restraint Hire

Service. RACT Technical Services also provided information

sessions to expectant parents and community groups.

Battery ServiceDuring 2007/2008, the RACT Battery Replacement Service

provided more than 8,000 batteries to members through the

Patrol and Contractor network. The RACT provides free delivery

and installation of RACT batteries, either at the roadside or at

the member’s home, in metropolitan areas with RACT patrol

vans carrying between 19 and 22 batteries to meet the needs of

members. Fitting the battery to a member’s vehicle is only part

of the service provided. After installation, the vehicle’s charging

and electrical systems are checked to ensure optimum starting

performance and battery life expectancy.

RACT batteries are also available at over 35 ROADSIDE Agents

and at selected Approved Repairers. RACT Marine Batteries

are distributed by four marine outlets throughout the state and

can also be delivered to members by ROADSIDE patrols in

metropolitan areas as well as to wharves and boat ramps.

Approved Repairer ServiceThis service continued to provide members with the assurance

of guaranteed vehicle repairs and maintenance from a network

of 57 RACT Approved Repairers throughout the state.

The Approved Repairer network has a wide range of specialist

repairers who are able to undertake almost any job required on

a vehicle ranging from general mechanical repairs to EFI

diagnosis, interior trim repairs and windscreen repair and

replacement. RACT Approved Repairers adhere to a code

of conduct set down by the RACT to ensure quality repairs.

Country Agent NetworkThe Country Agent network continued to provide quality service

to RACT members through 62 contractors in all country areas

of Tasmania. During the year, service was provided to 19,387

members in country areas.

Thirteen twin-cab slide-bed tow trucks are located at strategic

locations throughout the state to provide the best possible

service to RACT members when they break down. The twin cab

tow trucks have proved invaluable in the transport of members

and their families when their vehicle has broken down and

towing has become necessary. RACT ROADSIDE ULTIMATE

has provision for the transportation of both the vehicle and up to

five people to the member’s repairer or home from anywhere in

Tasmania at no cost if the vehicle cannot be mobilised at

the roadside.

Driver TrainingRACT Driver Training in Launceston, Devonport, Burnie and

Hobart continued to provide a valuable contribution to the

driver training of young motorists.

RACT is involved in the stakeholder reference group for

the novice driver training and licensing reforms.

Todd and Sharn Hitchins of Rokeby

are just two of the many Tasmanians

who have had their child restraints

expertly fitted by our RACT Technical

Services staff.

Approved Repairers like Matt Kaine, Rod Marshall and Danny Phasey of Marshall Auto Repairs of Legana are members of a statewide network offering members skilled, professional and guaranteed automotive repair services around the state.


RACT continued to provide support to the P-Plate action

program that provides Crash Free Driver Training courses for

P-Plate drivers at year 11/12 colleges around the State funded

by the Motor Accidents Insurance Board and Norske Skog.

Eight courses were conducted during the year. Driver training

resources were also provided over five days for the Rotary Youth

Driver Awareness (RYDA) program operating on the North-West

Coast.

Information SystemsThe Information Systems department undertook a number

of projects during the year:

• Upgradedandmodernisedthedatainfrastructure

that supports the branch network in order to provide

opportunities for future facilities that will enhance

customer service.

• Implementednewversionsofemailmonitoring,virus

protection and spam filtering software that will enhance

the efficiency and security of the RACT’s computer systems.

• WorkedwithoursisterclubinSouthAustralia,theRAASA,

to integrate and implement a new ROADSIDE Despatch

system. (Due November 2008.)

• FacilitatedtheopeningofthenewRosnybranchwith

the provision of voice and data services to the site.

• Renewedthecontractfortheprovisionofinformationand

communications technology services to RACT Insurance.

• Completedatrialofanelectronicvehicleinspectionsystem.

• Migratedcomputersystemsandservicesfromolderserver

technology to ‘virtual server’ technology which allocates

server processing capacity to meet demand during periods

of high volume and provides improved disaster recovery

capability.

Group MarketingFollowing a restructure of the business and senior management,

marketing activities related to individual products or service

areas are administered by the relevant manager.

• RACTWebsite

A substantial amount of work has been undertaken to

redevelop the RACT website, with Stage 1 (of three defined

stages) to be launched in October 2008. This work involved

all areas of the business, focus groups and four external

consulting businesses to assist in defining, designing and

developing the new web site.

The new site and its planned future directions is recognition

that to maintain relevance in the marketplace, RACT must

live up to its vision of being “…the most dynamic and

innovative service organisation in Tasmania.”

• DirectMarketing

During the year increased efforts were made in providing

information to members about other RACT products or

services. This has proven to be very successful, resulting in

significant growth in multiple product holdings by members.

Motor NewsOur bi-monthly magazine Motor News ( re-named Motor News

Journeys from the October-November 2008 issue) continues to

be a well-regarded and popular publication with RACT members

and the wider community.

During 2007/2008, the magazine’s distribution settled at

around 114,000, as audited by the Circulations Audit Board.

An operational highlight has been the ongoing refinement of

the mailing list database, in particular the removal of duplicated

copies sent to the same address. As well as cutting production

costs, this initiative avoids unnecessary use of resources and

has been well received by members.

There has been a clear focus on continuing to enhance the

appearance and improve the content of the magazine, through

the use of bigger and brighter images, a higher-quality stock

and stronger editorial material. Motoring and road safety issues

have remained the main focus of the opening section; while the

substantial travel section is popular and effective, as measured

by RACT Travelworld business written as a direct result of

promotion in the magazine.

Motor News continues to be a credible and reliable source of

news, advice and information for members in these key areas.

Each edition includes material such as current issues, letters,

opinion, technical information, car tests, consumer advice,

travel, touring and prizes, as well as information on RACT

products and services.

The Year in Detail

motornewsDecember 2007 / January 2008 The magazine of The Royal Automobile Club of Tasmania Limited

Travel Ideas start on page 45

Check The Wish List on page 30

News | Cars | Travel | Prizes

Australia’s Best Cars – the winners

Hobart’s gateway–

Bowen or Bridgewater?

Cruising Scandinavia

As part of our support for the P-Plate

Action program, Alex Jerrim of Driver

Safety Services presented his

Crash-free Driving course to

Claremont College students (from

left) Bec Monks, Matthew Hume,

Ashley Youd and Hayley Rayner.

Refining and streamlining the distribution database of the bi-monthly magazine Motor News has cut production costs and saved resources.


2007 08

Motor News has continued to play a pivotal role in RACT’s prolific

public affairs activities and is the Club’s central membership

communication tool.

has also welcomed regular attendance by senior DIER officials at

our Regional Advisory Committee meetings.

The Tasmanian Government launched its Tasmanian Road Safety

Strategy 2007-2016 in June 2007, with the four key strategic

directions of: Safer travel speeds; Best Practice Infrastructure;

Increased Safety for Young Road Users; and Enhanced Vehicle

Safety. This provides a sound strategic platform for road safety

initiatives in our State. RACT welcomes a number of initiatives

that have flowed from the Strategy that the Club has previously

lobbied for, including:

• broaderuseofinnovativetechnologysuchasElectronic

Speed Limits Signs, especially new flashing signs at school

zones, a trial of alcohol interlocks for repeat drink-driving

offenders and stronger drug-testing powers for police;

• extendingbetterroadsidesafetymeasuressuchasflexible

roadside barriers and audible road markings;

• theadoptionofminimumsafetyratingsfortheTasmanian

government vehicle fleet; and

• apubliceducationstrategyonthebenefitsofElectronic

Stability Control (ESC).

During the first half of 2008, the issue of fuel prices dominated

Tasmanian and national media as commodity prices escalated

and local petrol and diesel prices followed, with new Tasmanian

Premier, Hon. David Bartlett, announcing a Fuel Summit for

September 2008 in response. The RACT continued its own

price monitoring website and regularly spoke on behalf of

motorists when prices were too high compared to the rest of

Australia – more often than not, a lone voice in this arena.

Federal Labour made $445.45 million of road, rail and

infrastructure election promises for Tasmania prior to the 2007

Federal election. The RACT takes very seriously its role to

monitor these promises and whether or not they have been kept.

Members will be kept informed on the progress of these funding

promises through Motor News.

The Club has continued to contribute as a member in a number

of important forums such as the Tasmanian Road Safety Council

and the Road Safety Task Force. These remain valuable and

unique sources of official information supplied by agencies in a

collegial spirit to address the ongoing issue of the road toll.

Some key ongoing public advocacy issues include:

• Theneedforroadsafetyeducationtobetaughtinall

schools across Tasmania;

• Monitoringofprogressonkeyinfrastructureprojectssuch

as the Brighton transport hub and the north-south rail line

improvements;

During the year we were proud to

support two of our members in

successful endeavours for good

causes overseas – Walter van

Praag cycled for 4000 kilometres

through Europe to raise awareness

of cystic fibrosis; while long-distance

swimmer Anne Steele swam the

English Channel in support

of the Children’s Cancer Institute

of Australia.

The RACT’s view that the Bowen Bridge should be the main new gateway to Hobart generated widespread support from local councils, transport economists and many club members.

Advocacy and Public AffairsThe RACT now has a dedicated Public Policy and

Communications unit that underpins our efforts to influence

government and the policy agenda for the benefit of members

and to advance the aim of safer drivers, in safer cars, on

safer roads. RACT members can expect the Club to publicly

advocate on their behalf and to provide information on issues

that affect them.

To help achieve this, the Club requires reliable contacts within

the Government and Opposition parties at the Federal and

State levels, together with strong networks and collaboration

with other groups such as relevant government agencies, local

councils, community representatives and lobby groups.

2007/2008 was a period of significant change in Tasmanian

public life, including the resignation of Premier Paul Lennon,

the retirement of long-serving and well-regarded Tasmania

Police Commissioner, Richard McCreadie, and a number of

changes to ministerial arrangements. The Club is committed to

good working relationships and ongoing consultations with new

State Minister for Infrastructure Hon. Graeme Sturges MHA,

and Tasmania Police.

In addition, during 2008 we concluded a new two-tiered

framework for regular formal consultations between RACT and

the Department of Infrastructure, Energy and Resources [DIER],

at both Agency Head/CEO and General Manager levels. This has

provided more effective discussions and information flows with

our key Tasmanian Government stakeholder agency. The Club


• ThefutureofpublictransportinTasmania;

• Railownershipandfreightcapacityimprovements

in the State;

• Thepersistenceofrepeatdrink-drivingoffencestatistics;

• SafetydefectsintheTasmanianpassengerfleet;and

• Howwecanbestensureourolderdriversaresupported

when it comes to their personal mobility.

RACT has also supplied resources for a number of policy and

communications working groups as a member of the Australian

Automobile Association (AAA). These include the Australasian

New Car Assessment Program (ANCAP) for crash-testing

and safety rating, the Australian Road Assessment Program

(AusRAP), and Australia’s Best Cars judging process and

national magazine. Two key national policy projects RACT has

worked on during 2007/2008 include:

• keys2drive: the Australian Government committed

$17 million over five years in its 2008 Budget for the

Clubs to implement the program, which aims to develop

supervision of learner drivers and will deliver new online

resources for novice, supervisors and instructors

(see www.keys2drive.info). Tasmanian-based Driver Safety

Services is managing the project and the national pilot is

expected to be trialled in Tasmania in early 2009. Australian

Government Infrastructure Minister, Hon. Anthony Albanese

MHR, announced the funding at the RACT’s head office in

Hobart on 1 May 2008.

• Greener Motoring: The motoring clubs have adopted

principles to ensure sustainable motoring for all members

and have committed to assist and encourage members

to reduce or offset their emissions, along with minimising

the emissions generated by Club products and services.

The AAA also hosted a national climate change summit in

Canberra in June 2008 to bring together leading experts

to critically examine the place of cars in the climate change

framework and work on future strategies

(see www.aaa.asn.au/greenermotoring).

The RACT will continue to take the concerns of its membership

directly to Government to effect policy change where necessary.

At the same time, the RACT will publicly support good policy

and action and will further develop its role as a “watchdog” for

its members and as a good corporate citizen and leader in the

wider Tasmanian community.

Regional Advisory Committees

North West

During 2007/2008, the North West Regional Advisory

Committee continued to lobby for improvements to sections of

the road network on the North West Coast. In particular there

were issues relating to the speed limit imposed on the Bass

Highway at Round Hill, Burnie following a major upgrade.

The Sisters Hills highway project is continuing and the

Committee is pleased with the outcome to date. The Ulverstone

Bypass dual highway was completed and has proven to be a

significant improvement to efficient traffic flow along the North

West Coast.

The Committee was also concerned about safety issues in most

towns on the North West Coast including traffic movement in

Devonport. The results from a traffic management study

are awaited.

Doctors Rocks, near Wynyard, and the Stanley/Bass Highway

intersection were areas of concern; however, each of these

areas will receive attention by the Department of Infrastructure,

Energy and Resources during 2008/2009.

During the year, Australia’s motoring

clubs released a joint climate

change statement and publicised a

package of emission-reduction and

member-education measures.

How to save fuel and cut greenhouse gas emissions

April / May 086 7April / May 08

Private motor vehicles in Australia produce around 43.7Mt of greenhouse gases each

year, which accounts for approximately 8% of the nation’s total greenhouse gas emissions.1

Gases released by a combustion engine are linked to its fuel consumption. One of the most cost-effective means of reducing vehicle emissions is by practising ‘eco-driving’ techniques.

This strategy can reduce fuel consumption by changing your driving style, planning vehicle trips, choosing efficient vehicles and driving smoothly.

Eco-driving is easy to do, but it can make significant improvements to fuel consumption. It’s simply a better and safer way to drive.

Check these ten eco-driving tips – can they help you change your driving style?

1. Buy green Check environmental performance (fuel

consumption and greenhouse rating) before you buy a car. Visit www.greenvehicleguide.gov.au for green star ratings.

2. Plan your journey Planning your route can avoid delay and

diversion. Ten minutes of unnecessary driving in a one-hour trip means a 14% decrease in fuel efficiency. For short journeys consider cycling, public transport or walking.

3. Check tyre pressures frequently

Driving on tyres with air pressure 50kPA lower than it should be decreases fuel efficiency by up to 4%.

4. Reduce loads and avoid the need for roof racks

Driving with unnecessary onboard weight leads to a significant decrease in fuel efficiency. The air resistance caused by roof racks and open windows adds to aerodynamic drag and fuel consumption. The faster you drive, the more air resistance there is. Driving with all the windows open at highway speeds can reduce fuel efficiency by more than 5%.

5. Do not warm up your engine before driving off

Today’s passenger cars don’t require warming up, except in very cold climates and after long periods of non-use. Slow running is enough to warm up the engine.

6. Use air conditioning only when necessary

Using air conditioning when the outdoor temperature is 25°C increases fuel consumption by 12%.

7. Accelerate gently and keep your speed constant

Start off gently (20km/h in five seconds, for an 11% reduction in fuel consumption) and avoid abrupt, heavy acceleration while driving. Avoid tailgating, which causes unnecessary acceleration/deceleration and increases fuel consumption by up to 6%. Use higher gears as soon as traffic allows.

8. Use engine braking Releasing the accelerator when you

recognise the need to slow down stops the fuel supply, leading to a 2% decrease in fuel consumption.

9. Do not idle your engine Ten minutes of engine idling (in neutral,

with the air conditioning off) wastes 130ml of fuel. If it is safe to do so, turn your engine off instead of letting it idle.

10. Offset your CO2 emissions If you are driving economically and cannot

reduce your car use then consider buying carbon offsets equivalent to your annual mileage.

1 Australian Greenhouse Office (AGO), National Greenhouse Gas Inventory, 2005.

Eco-driving

The Australian Automobile Association and its member clubs, including the RACT, have

taken up the environmental challenge with the release of a formal climate change statement and a package of emission-reduction and member-education measures.

Our Group Chief Executive Greg Goodman says that the climate change challenge requires all sectors of the community to play their part in reducing emissions, and that the motoring clubs would continue to take a leading role in promoting this approach.

“AAA and the clubs have for many years strongly supported cleaner, less carbon-intensive and sustainable motoring through a range of initiatives including vehicle testing, campaigns for legislative action such as fuel quality standards and education like the Green Vehicle Guide,” Mr Goodman says.

“It’s important that as well as advising our members on how to reduce the impact of their motoring emissions, the RACT must also ensure that we are setting a ‘good corporate citizen’ example ourselves.”

The AAA Climate Change initiatives, in which the RACT will participate, include:

the AAA clubs’ environmental activities and initiatives, to ensure a well-informed national debate

to identify strategies to lower organisational greenhouse gas emissions

RACT members through the AAA’s Eco-driving project, as well as regular communications through the RACT’s website and magazine

RACT’s roadside service fleet emissions

“With the recent announcement of the domestic motor vehicle industry review to be headed by Steve Bracks, the motoring clubs through AAA will continue to advocate a strong focus on low-emission, lower fuel-consumption vehicles,” Mr Goodman says.

The AAA Climate Change statement provides a new impetus for the RACT to assist in reversing the global warming trend, while balancing motorists’ need for safe and affordable travel.

It’s important to understand that motorists make only an 8% contribution to Australia’s greenhouse emissions – and with the RACT’s help, Tasmanian drivers can take practical steps to become part of the solution by further reducing that figure.

AAA’s national climate change statement On The Road To Greener Motoring can be downloaded from www.aaa.asn.au. Check the Green Vehicle Guide at www.greenvehicleguide.gov.au.

* Motorists’ Attitudes and Priorities in 2007: Australian

Automobile Association National Survey – conducted by

ANOP Research Services Pty Ltd in May 2007

The road to greener motoringRecent research* carried out for motoring clubs

in Australia shows that motorists’ concern

about the environmental impact of cars is

on the rise, while support for the role of the

clubs in providing advocacy and

information on key issues affecting

members remains high.

The Year in Detail

With the other Australian motoring clubs, RACT is a strong supporter of ANCAP, the Australasian New Car Assessment Program, which conducts crash tests on all new vehicles and awards star ratings for safety.

North

The Northern Regional Advisory Committee continued to

represent the interests of Northern motorists by lobbying the

State Government and other authorities on a range of road

safety and road improvement issues.


2007 08

In 2007/2008, significant issues handled by the Committee

included upgrading of the East Tamar Highway, Dilston Bypass

issues, improvements to the West Tamar Highway, east/west

connector roads across Launceston, upgrading of northern and

north east truck routes, on/off ramps from Oakdene Rd to Bass

Highway at the Silverdome, speed reduction on the West Tamar

Highway at Riverside, as well as local speed zoning and traffic

management issues. The Committee continued its interest in

upgrading rail infrastructure to enable more freight, particularly

logs, to be transported by rail to reduce log truck kilometres

travelled on our roads.

South

The Southern Regional Advisory Committee has welcomed

an increase in direct dialogue with the Tasmanian Government.

Senior officials from the Department of Infrastructure, Energy

and Resources have been guests at our meetings this year,

providing a number of informative updates and giving members

the opportunity to ask a series of direct questions. Highlights

of the Committee’s lobbying efforts include the decision to ban

right-hand turns out of Cleary’s Gates onto the Brooker Highway,

the planned implementation of a clearway in Macquarie Street

during peak travel time, and a government trial of alcohol

interlock devices to help address repeat drink-driving offences.

During the year, the Committee also hosted several long-

standing RACT members to address the meeting about their

particular interests in road safety or infrastructure planning.

Australian Automobile AssociationThe Australian Automobile Association (AAA) ably represented

the RACT and its affiliated interstate clubs/associations at both

national and international levels. AAA is represented on many

national bodies and the viewpoints expressed by the association

are recognised as the official voice of motorists in this country.

ReciprocityFor many years reciprocal ROADSIDE assistance has been

offered by each of the state motoring organisations, an initiative

that provided an enormous boost not only to their membership

but also to motoring generally and interstate travel in particular.

Today, reciprocal service arrangements extend to more than

100 similar organisations around the world through affiliation

with the Federation Internationale de l’Automobile (FIA).

StaffThe Board is pleased to place on record its personal

appreciation for the manner in which the RACT team has risen to

the many challenges in the year with diligence and commitment

to member service and to ‘live the RACT Vision’ of being “…the

most dynamic and innovative service organisation in Tasmania.”

Acknowledgements 2007/2008 saw the continued involvement of the RACT with

many bodies such as government departments, agencies and

businesses. The Board of the RACT appreciates its relationship

with these many organisations. The Board also acknowledges

the wider RACT family in the successes achieved during the

year. ROADSIDE contractors, country agents, approved repairers

and many other businesses and organisations assisted the RACT

in meeting the needs of its members.

It also appreciates the interest of the media in the many issues

that were raised by the RACT on behalf of its membership base.

Roger Locke Greg Goodman

President Group Chief Executive

Bonorong Wildlife Centre keeper

Kelsey Smith with Dougie the

devil – through our club magazine

we have helped Bonorong Park

publicise their initiatives to protect

our island’s native wildlife.


Directors’ Report

In respect of the year ended 30th June 2008, the directors

ofTheRoyalAutomobileClubofTasmaniaLimited

(RACTLimited)presentthefollowingreportmadeout

inaccordancewitharesolutionofthedirectors.

1. DIRECTORS The names of the directors during and since the end

of the financial year are:

MrRSLocke(President)

MrSESlade(VicePresident)

MrPJJoyce(VicePresident)

MsJMArcher

MrECBest,AM,JP

MrJRBloomfield,JP(to30/10/2007)

Mr D M Catchpole

MrBFClark(from26/03/2008)

MrPADixon(from31/07/2007)

Mr R H Holmes

MrCJLangdon

MrACStacey,AM

MrsKAWestwood

Directorsareallmembersinaccordancewiththe

Constitution.Directors’qualificationsandexperienceare

providedinsection13ofthisreport.

2. PRINCIPAL ACTIVITIES

Theprincipalactivitiesoftheconsolidatedentityweretoact

as a roadside assistance provider, travel agent and general

insurancedistributor.

3. FINANCIAL RESULTS OF THE CONSOLIDATED ENTITY

Theconsolidatedentity’snetprofitafterincometax

fortheyearended30June2008,was$1,440,531

(2007,$3,074,002).

4. REVIEW OF OPERATIONSAreviewofoperationsisincludedinthePresident’sReport

whichaccompaniesthisreport.

5. SIGNIFICANT CHANGES IN STATE OF AFFAIRS

AsofSeptember12007theconsolidatedentityacquired

aninterestinRACTInsurancePtyLtdasaresultofajoint

ventureagreementwithSuncorpMetwayInsuranceLtd.

6. FUTURE DEVELOPMENTS

Disclosureofinformationregardinglikelydevelopmentsin

the operations of the consolidated entity in future financial

yearsandtheexpectedresultsofthoseoperationsislikely

toresultinunreasonableprejudicetotheconsolidatedentity.

Accordingly,thisinformationhasnotbeenincludedin

thisreport.

7. MEETINGS OF DIRECTORS During the financial year, 27 meetings of directors (including

committees)wereheld.Thenumberofmeetingsattended

by each director during the year is disclosed in the

followingtable.

ThecompanyhasanAudit&RiskManagementCommittee

whichmet5timesduringthefinancialyear.Themembers

ofthiscommitteeareMrCJLangdon,MsJMArcher,

MrRHHolmesandMrsKAWestwood.TheAudit&Risk

ManagementCommittee’smainresponsibilitiesareto

ensurethattheauditprocess(bothexternalandinternal)

is effective, that external reporting and corporate governance

responsibilities are addressed, and that internal control

andriskmanagementstructuresareappropriate.

Mr R S Locke (President)

Mr P J Joyce (Vice-President)

Mr S E Slade (Vice-President)

Ms J M Archer


2007 08

* Director not a member of this committee

Mr D M Catchpole

Mr C J LangdonMr R H Holmes

Mr B F Clark (from 26/03/2008) Mr P A Dixon (from 31/07/2007)

Mrs K A WestwoodMr A C Stacey AM

Mr E C Best AM, JP

Board/Committee Board Road & TrafficAudit&RiskManagement

InvestmentBoard & ExecutiveReview

Total meetings heldDuring 2007/2008

11 6 5 4 1

Director Attendance at Meetings

JMArcher 10 5 3 (from30/10/07) * *

ECBestAMJP 9 3 (from30/10/07) * 3 1

J R Bloomfield JP 2 (to30/10/07) 1(to30/10/07) * * *

D M Catchpole 9 * * * *

BFClark 4 (from26/03/08) 1 (from29/04/08) * * *

PADixon 11 4 (from30/10/07) * * *

R H Holmes 11 4 (to30/10/07) 5 3 (from30/10/07) *

P J Joyce 10 5 * 4 *

CJLangdon 9 * 5 4 *

RSLocke 8 * 0 (to 30/10/07) 3 1

S E Slade 9 6 * * 1

ACStaceyAM 9 * * 3 1

KAWestwood 10 * 4 * *


8. EVENTS SUBSEQUENT TO BALANCE DATEThere are no other matters or circumstances that have arisen

since the end of the financial year that has significantly

affected, or may significantly affect, the operations of the

consolidated entity, the results of those operations, or the

state of affairs of the consolidated entity in future financial

years.

9. INDEMNITY OF OFFICERS AND AUDITORSDuring the financial year, the company paid a premium in

respect of a contract insuring the directors of the company

(asnamedabove),thecompanysecretary,MrGreg

Goodman, and all other executive officers of the company

and of any related body corporate, against a liability incurred

as such a director, secretary or executive officer, to the extent

permitted by the Corporations Act 2001.Thecontractof

insurance prohibits disclosure of the nature of the liability and

theamountofthepremium.

Thecompanyhasnototherwise,duringorsincethefinancial

year, indemnified or agreed to indemnify an officer or auditor

of the company or of any related body corporate against a

liabilityincurredassuchanofficerorauditor.

10. CORPORATE GOVERNANCE Asatthedateofthisreport,theboardcomprisedtwelve

directors.Theboardmeetsonamonthlybasisandits

primary functions include:

(a) theapprovaloftheannualfinancialstatements

and the supervision of external audit activities;

(b) theestablishmentofthelongtermgoalsofthecompany

and strategic plans to achieve those goals;

(c) thereviewandadoptionofannualbudgetsforthe

financial performance of the company and monitoring

the results on a regular basis;

(d) ensuringthatthecompanyhasimplementedadequate

systems of internal controls; and

(e) appropriatemonitoringofcomplianceandinternal

auditactivities.

Alldirectorshavetherighttoseekindependentlegaland

accountingadvice(atthecompany’sexpense)concerning

anyaspectofthecompany’soperationsorundertakings.

11. COMPANY SECRETARYMrGGoodmanMAICD,CompanySecretary,

wasappointedtotherolein1999.

12. AUDITOR’S INDEPENDENCE DECLARATION

TheAuditor’sindependencedeclarationisincluded

onpage20ofthefinancialreport.

Directors’ Report


2007 08

13. DIRECTORS’ QUALIFICATIONS AND EXPERIENCE

Mr R S Locke BE,GradDipProfMgt,FIEAust.,MAICD

Chartered Professional Engineer

Director,RACTInsurancePtyLtd

Mr S E Slade CDCDip,GradDipHSc,GradCertRiskMgt,FAICD,MRMIA,

CPMSIA,RSP(Aust)

ChiefExecutiveOfficer,YMCAofHobartInc

PrincipalConsultant,BusinessContinuityInstituteofAustralia

Alderman,GlenorchyCityCouncil

Director, O Group

Mr P J Joyce LL.B,MCL,MAICD

Managing Partner, Butler McIntyre & Butler

Member,TaxationInstituteofAustralia(TasmanianDivision)

Ms J M Archer GAICD,GMQ

Engagement & Development Manager,

UniversityofTasmania,Launceston

Director, St Giles Society

Mr E C Best, AM,JP,BSc,BE,MBA,FIEAust.,FAICD

Director,RACTInsurancePtyLtd

Mr J R Bloomfield JP FREI,MAICD(to30/10/2007)

Company Director, Bloomfield First National

Fellow,RealEstateInstituteofTasmania

Director, Real Estate Institute of Tasmania

Public Officer, Central Coast Chamber of Commerce

& Industry

VicePresident,HonoraryJusticesAssociationofTasmania

- North West

Mr D M Catchpole B.Ec,DipFP,FCPA,CFP,FAICD

Chairman-BoardofAdvice,ShadforthsLimited

Treasurer, Royal Hobart Hospital Research Foundation

Mr B F Clark(from26/03/2008)

Company Director

Mr P A Dixon, LL.B.,BD(Hons),MBA,MAICD(from31/07/2007)

LegalPractitioner

LecturerinManagement,SchoolofManagement,

University of Tasmania

AssociateDean,(Teaching&Learning)FacultyofBusiness,

University of Tasmania

Notary Public

Mr R H HolmesAASA,MAICD

Board Member, Tasmanian Transport Industry

AccreditationBoard

Director,TBAServicesPtyLtd

Mr C J LangdonCA,MAICD

Company Director

Mr A C Stacey, AM,MAICD

Trustee Director, Tasplan Industry Superannuation Fund

Chairman, Theatre Royal Management Board

Member, Brand Tasmania Council

Mrs K A Westwood, B.Com.,GAICD,FNIA,ASA,MIIA,MRMIA

Manager Commercial, Nyrstar

Thisreportissignedinaccordancewitharesolutionof

directorspursuanttosection298(2)oftheCorporations

Act 2001,this23rdSeptember,2008.

RSLOCKE

Director

CJLANGDON

Director


Auditor’s Independence Declaration

1st floor 160 Collins Street Hobart 7000, PO Box 1083 Hobart TAS 7001 Tel: (03) 6223 6155 Fax: (03) 6223 8993 Email: [email protected] Internet: www.wlf.com.au

Partners: Peter Beven, Robert Whitehouse, Harvey Gibson, Danny McCarthy,

Douglas Thomson, Joanne Doyle, Stuart Clutterbuck, Ian Wheeler Managers: Shenna Hurd, Marg Marshall, Sharon Breen, Dean Johnson,

Alicia Leis, Melanie Richardson, Nick Carter, Paul Lyons, Kane Ingham, Kate Barnes Consultants: Brent Palfreyman, Robert Whitehouse

Auditor’s Independence Declaration Auditor’s Independence Declaration to the Directors of The Royal Automobile Club of Tasmania Ltd In relation to our audit of the financial report of The Royal Automobile Club of Tasmania Ltd for the financial year ended 30 June 2008 to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.

H J GIBSON PARTNER WISE LORD & FERGUSON Date: 12 September 2008


Chartered Accountants

advice to advantage


2007 08Statement of Financial Performance for the financial year ended 30 June 2008

CONSOLIDATED COMPANY

NOTES 2008

$

2007

$

2008

$

2007

$

Revenue 2 21,964,434 22,649,511 21,540,710 20,412,450

Share of profit in associate 2,7 518,134 - - -

Other income (992,870) 516,554 (21,601) 151,325

Roadside agents expenses (2,092,321) (1,882,408) (2,092,320) (1,882,408)

Cost of goods sold (617,486) (599,676) (617,486) (599,676)

Employee benefits expense (10,030,891) (9,465,315) (10,030,891) (9,465,315)

Marketingexpense (1,020,054) (1,117,302) (1,020,054) (1,117,302)

IT & communications expense (1,091,542) (918,828) (1,091,542) (918,828)

Occupancy & maintenance expense (1,295,179) (1,005,021) (1,295,179) (1,005,021)

Financial & consultation fee expense (660,430) (616,150) (638,848) (616,150)

Depreciation & amortisation expense (1,053,988) (1,084,816) (1,053,988) (1,084,816)

Other expenses (2,368,811) (2,762,686) (2,365,822) (2,723,429)

Profit before income tax 1,258,996 3,713,863 1,312,979 1,150,830

Income tax expense 3 181,535 (639,861) 80,885 148,857

Profit attributable to members

of the parent entity 1,440,531 3,074,002 1,393,864 1,299,687

NotestotheFinancialStatementsareincludedonpages25-54.


Statement of Financial Positionas at 30 June 2008


2008

$

2007

$

2008

$

2007

$

Current Assets NOTES

Cashassetsandcashequivalents 4,197,312 2,795,538 1,118,124 931,777

Receivables 5 1,848,734 3,421,883 1,578,827 2,221,757

Inventories 9 127,237 133,051 127,237 133,051

Other current assets 10 271,139 279,264 271,139 279,264

Other financial assets 6 2,000,000 3,300,000 16,511,153 15,128,243

Total Current Assets 8,444,422 9,929,736 19,606,480 18,694,092

Non-Current Assets

Intangibles 8 1,477,508 1,585,490 1,477,508 1,585,490

Property,plantandequipment 11 7,661,325 7,428,140 7,544,000 7,428,140

Deferred tax asset 3 221,157 106,757 221,157 98,898

Investment in associate 7 14,961,341 - - -

Other non-current assets 10 198,101 399,666 198,101 399,666

Other financial assets 6 4,619,635 17,622,304 10,001 10,001

Total Non-Current Assets 29,139,067 27,142,357 9,450,767 9,522,195

Total Assets 37,583,489 37,072,093 29,057,247 28,216,287

Current Liabilities

Payables 12 2,749,377 2,807,574 2,711,851 2,809,008

Provisions 13 5,382,720 5,082,720 5,382,720 5,082,720

Current tax liability 3 (145,434) 562,262 (145,434) 562,262

Total Current Liabilities 7,986,663 8,452,556 7,949,137 8,453,990

Non-Current Liabilities

Provisions 14 313,464 263,440 313,464 263,440

Deferred tax liabilities 3 642,473 1,046,136 476,821 465,294

Total Non-Current Liabilities 955,937 1,309,576 790,285 728,734

Total Liabilities 8,942,600 9,762,132 8,739,422 9,182,724

Net Assets 28,640,889 27,309,961 20,317,825 19,033,563

Equity

Retained earnings 27,726,294 26,395,366 19,403,230 18,118,968

Reserves 914,595 914,595 914,595 914,595

Total Equity 28,640,889 27,309,961 20,317,825 19,033,563



2007 08Statement of Changes in EquityFor the financial year ended 30 June 2008


Asset

revaluation

reserve

Retained

earnings

Total

attributable to

equity holders

of the entity

Asset

revaluation

reserve

Retained

earnings

Total

attributable to

equity holders

of the entity

$ $ $ $ $ $

Balance at 1 July 2006 - 23,089,455 23,089,455 - 16,587,372 16,587,372

Actuarialgain/(loss)on

defined benefit plans - 217,013 217,013 - 217,013 217,013

Deferred tax relating to

defined benefit plans - (65,104) (65,104) - (65,104) (65,104)

Revaluation of land and

buildings 1,182,715 - 1,182,715 1,182,715 - 1,182,715

Transfer of realised gain (80,000) 80,000 - (80,000) 80,000 -


revaluation of property (188,120) - (188,120) (188,120) - (188,120)

Net income recognised

directlyinequity 914,595 231,909 1,146,504 914,595 231,909 1,146,504

Profit for the year - 3,074,002 3,074,002 - 1,299,687 1,299,687

Total recognised income &

expense for the year 914,595 3,305,911 4,220,506 914,595 1,531,596 2,446,191

Balance at 30 June 2007 914,595 26,395,366 27,309,961 914,595 18,118,968 19,033,563

Actuarialgain/(loss)on

defined benefit plans - (156,574) (156,574) - (156,574) (156,574)


defined benefit plans - 46,972 46,972 - 46,972 46,972

Net income recognised

directlyinequity - (109,602) (109,602) - (109,602) (109,602)

Profit for the year - 1,440,531 1,440,531 - 1,393,864 1,393,864

Total recognised income &

expense for the year - 1,330,928 1,330,928 - 1,284,262 1,284,262

Balance at 30 June 2008 914,595 27,726,294 28,640,889 914,595 19,403,230 20,317,825



Statement of Cash FlowsFor the financial year ended 30 June 2008


NOTES 2008

$

2007

$

2008

$

2007

$

Cash flows from operating activities

Subscription income 8,831,299 8,332,777 8,831,299 8,332,777

Other income 15,645,948 14,772,314 15,645,948 14,772,314

Payments made to employees and suppliers (21,214,698) (21,398,992) (21,199,087) (21,328,179)

Interest received 1,555,043 2,046,418 65,124 25,896

Dividends received 258,270 - - -

Income tax paid (997,254) (638,808) (997,254) (638,808)

Net cash provided by operating activities 21 4,078,608 3,113,709 2,346,030 1,164,000

Cash flows from investing activities

Proceeds from sale of property, plantandequipment 7,150 601,084 7,150 601,084

Proceeds from sale of investments 14,967,153 2,827,653 - -

Paymentsforproperty,plantandequipment (1,050,607) (1,394,982) (1,050,607) (1,394,982)

InvestmentinAssociates (14,443,207) - - -

Purchase of Investments (2,157,323) (3,804,719) (40,000) -

Provision of lending to related party - - (1,076,226) 605,691

Net cash used in investing activities (2,676,834) (1,770,964) (2,159,683) (188,207)

Net increase/(decrease) in cash held 1,401,774 1,342,745 186,347 975,793

Cash at the beginning of the financial year 2,795,538 1,452,793 931,777 (44,016)

Cash at the end of the financial year 21 4,197,312 2,795,538 1,118,123 931,777



2007 08

1. SUMMARY OF ACCOUNTING POLICIES

Statement of Compliance

The financial report is a general purpose financial report

which has been prepared in accordance with the Corporations

Act 2001, Accounting Standards, and complies with other

requirements of the law. Accounting Standards include Australian

equivalents to International Financial Reporting Standards

(‘A-IFRS’). Compliance with the A-IFRS ensures that the

consolidated financial statements and notes of the consolidated

entity comply with International Financial Reporting Standards

(‘IFRS’).

The financial statements were authorised for issue by

the directors on 23 September 2008.

Basis of Preparation

The financial report has been prepared on the basis of historical

cost, except for the revaluation of certain non-current assets

and financial instruments. Cost is based on the fair values of

the consideration given in exchange for assets.

In the application of A-IFRS, management is required to make

judgments, estimates and assumptions about carrying values

of assets and liabilities that are not readily apparent from other

sources. The estimates and associated assumptions are based

on historical experience and various other factors that are

believed to be reasonable under the circumstances, the results

of which form the basis of making the judgments. Actual results

may differ from these estimates.

The estimates and underlying assumptions are reviewed on an

ongoing basis. Revisions to accounting estimates are recognised

in the period in which the estimate is revised if the revision

affects only that period, or in the period of the revision and future

periods if the revision affects both current and future periods.

Judgments made by management in the application of A-IFRS

that have significant effects on the financial statements and

estimates with a significant risk of material adjustments in the

next year are disclosed, where applicable, in the relevant notes

to the financial statements.

Accounting policies are selected and applied in a manner

which ensures that the resulting financial information satisfies

the concepts of relevance and reliability, thereby ensuring that

the substance of the underlying transactions or other events

is reported.

Notes to and forming part of the

Financial Statementsfor the financial year ended 30 June 2008

Significant Accounting Policies

The following significant accounting policies have been adopted

in the preparation and presentation of the financial report:

(a) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, cash in

banks and investments in money market instruments, net of

outstanding bank overdrafts.

(b) Principles of Consolidation

The consolidated Statement of Financial Position is prepared

by combining the Statements of Financial Position of all the

entities that comprise the consolidated entity, being The Royal

Automobile Club of Tasmania Limited (the company) and its

subsidiaries as defined in Accounting Standard AASB 127

‘Consolidated and Separate Financial Statements’. Consistent

accounting policies are employed in the preparation and

presentation of the consolidated Statement of Financial Position.

On acquisition, the assets, liabilities and contingent liabilities

of a subsidiary are measured at their fair values at the date of

acquisition. Any excess of the cost of acquisition over the fair

values of the identifiable net assets acquired is recognised as

Goodwill. If, after reassessment, the fair values of the identifiable

net assets acquired exceeds the cost of acquisition, the deficiency

is credited to Profit and Loss in the period of acquisition.

The consolidated Financial Statements include the information

and results of each subsidiary from the date on which the

company obtains control and until such time as the company

ceases to control such entity.

In preparing the consolidated Statement of Financial Position, all

intercompany balances and transactions, and unrealised profits

arising within the consolidated entity are eliminated in full.

(c) Income Tax

Current tax

Current tax is calculated by reference to the amount of income

taxes payable or recoverable in respect of the taxable profit

or tax loss for the period. It is calculated using tax rates and

tax laws that have been enacted or substantively enacted by

the reporting date. Current tax for current and prior periods is

recognised as a liability (or asset) to the extent that it is unpaid

(or refundable).

Deferred tax

Deferred tax is accounted for using the comprehensive Balance

Sheet liability method in respect of temporary differences

arising from differences between the carrying amount of assets




and liabilities in the Statement of Financial Position and the

corresponding tax base of those items.

In principle, deferred tax liabilities are recognised for all taxable

temporary differences. Deferred tax assets are recognised to

the extent that it is probable that sufficient taxable amounts

will be available against which deductible temporary

differences or unused tax losses and tax offsets can be utilised.

However, deferred tax assets and liabilities are not recognised

if the temporary differences giving rise to them arise from the

initial recognition of assets and liabilities (other than as a result

of a business combination) which affects neither taxable income

nor accounting profit. Furthermore, a deferred tax liability is not

recognised in relation to taxable temporary differences arising

from goodwill.

Deferred tax liabilities are recognised for taxable temporary

differences arising on investments in subsidiaries except where

the consolidated entity is able to control the reversal of the

temporary differences and it is probable that the temporary

differences will not reverse in the foreseeable future.

Deferred tax assets arising from deductible temporary

differences associated with these investments and interests

are only recognised to the extent that it is probable that there

will be sufficient taxable profits against which to utilise the

benefits of the temporary differences and they are expected

to reverse in the foreseeable future.

Deferred tax assets and liabilities are measured at the tax rates

that are expected to apply to the period(s) when the asset and

liability giving rise to them are realised or settled, based on tax

rates (and tax laws) that have been enacted or substantively

enacted by the reporting date. The measurement of deferred tax

liabilities and assets reflects the tax consequences that would

follow from the manner in which the consolidated entity expects,

at the reporting date, to recover or settle the carrying amount of

its assets and liabilities.

Deferred tax assets and liabilities are offset when they relate

to income taxes levied by the same taxation authority and the

company/consolidated entity intends to settle its current tax

assets and liabilities on a net basis.

Current and deferred tax for the period Current and deferred tax is recognised as an expense or income

in the Statement of Financial Performance, except when it relates

to items credited or debited directly to equity, in which case the

deferred tax is also recognised directly in equity, or where it arises

from the initial accounting for a business combination, in which

case it is taken into account in the determination of goodwill.

Tax consolidation

The company and all its wholly-owned Australian resident entities

are part of a tax consolidated group under Australian taxation

law. The Royal Automobile Club of Tasmania Limited is the

head entity in the tax-consolidated group. Tax expense/income,

deferred tax liabilities and deferred tax assets arising from

temporary differences of the members of the tax-consolidated

group are recognised in the separate financial statements of

the members of the tax-consolidated group using the ‘separate

taxpayer within group’ approach. Current tax liabilities and

assets and deferred tax assets arising from unused tax losses

and tax credits of the members of the tax-consolidated group

are recognised by the company (as head entity in the tax-

consolidated group).

Due to the existence of a tax funding arrangement between the

entities in the tax-consolidated group, amounts are recognised

as payable to or receivable by the company and each member

of the group in relation to the tax contribution amounts paid or

payable between the parent entity and the other members of

the tax-consolidated group in accordance with the arrangement.

Where the tax contribution amount recognised by each member

of the tax-consolidated group for a particular period is different

to the aggregate of the current tax liability or asset and any

deferred tax asset arising from unused tax losses and tax

credits in respect of that period, the difference is recognised

as a contribution from (or distribution to) equity participants.

(d) Goods and Services Tax

Revenues, expenses and assets are recognised net of the

amount of goods and services tax (GST), except:

i. where the amount of GST incurred is not recoverable from

the taxation authority, it is recognised as part of the cost of

acquisition of an asset or as part of an item of expense; or

ii. for receivables and payables which are recognised inclusive

of GST.

The net amount of GST recoverable from, or payable to, the

taxation authority is included as part of receivables or payables.

Cash flows are included in the Cash Flow Statement on a gross

basis. The GST component of cash flows arising from investing

and financing activities which is recoverable from, or payable to,

the taxation authority is classified as operating cash flows.


2007 08

(e) Property, Plant and Equipment

Property, plant and equipment and leasehold improvements are

stated at cost less accumulated depreciation and impairment.

Cost includes expenditure that is directly attributable to the

acquisition of the item. In the event that settlement of all or part

of the purchase consideration is deferred, cost is determined by

discounting the amounts payable in the future to their present

value as at the date of acquisition.

Depreciation is provided on property, plant and equipment,

including freehold buildings but excluding land. Depreciation is

calculated on a straight line basis so as to write off the net cost

or other revalued amount of each asset over its expected useful

life to its estimated residual value. Leasehold improvements are

depreciated over the period of the lease or estimated useful life,

whichever is the shorter, using the straight line method.

The estimated useful lives, residual values and depreciation

methods are reviewed at the end of each annual reporting period.

The following estimated useful lives are used in the calculation of

depreciation:

Plant & equipment 4 to 10 years

Leasehold Improvements 7 years

Buildings 40 years

Revaluations of land and buildings

Any revaluation increment is credited to the asset revaluation

reserve included in the equity section of the Statement of Financial

Position, except to the extent that it reverses a revaluation

decrease of the same asset previously recognised in profit or loss,

in which case the increase is recognised in profit or loss.

Any revaluation decrease is recognised in profit or loss, except

to the extent that it offsets a previous revaluation increase for the

same asset, in which case the decrease is debited directly to

the asset revaluation reserve to the extent of the credit balance

existing in the revaluation reserve for that asset.

Additionally, any accumulated depreciation as at the revaluation

date is eliminated against gross carrying amounts of the assets

and the net amounts are restated to the revalued amounts of

the assets.

Upon disposal or derecognition, any revaluation reserve relating

to the particular asset being sold is transferred to retained

earnings.

Disposal

An item of property, plant and equipment is derecognised

upon disposal or when no further future economic benefits are

expected from its use or disposal.

Any gain or loss arising on derecognition of the asset (calculated

as the difference between the net disposal proceeds and the

carrying amount of the asset) is included in the profit or loss in

the year the asset is derecognised.

(f) Impairment of Assets

At each reporting date, the consolidated entity reviews the

carrying amounts of its tangible and intangible assets to

determine whether there is any indication that those assets

have suffered an impairment loss. If any such indication exists,

the recoverable amount of the asset is estimated in order to

determine the extent of the impairment loss (if any). Where the

asset does not generate cash flows that are independent from

other assets, the consolidated entity estimates the recoverable

amount of the cash-generating unit to which the asset belongs.

Goodwill, intangible assets with indefinite useful lives and

intangible assets not yet available for use are tested for

impairment annually and whenever there is an indication that

the asset may be impaired. An impairment of goodwill is not

subsequently reversed. Refer also to note 1(n).

Recoverable amount is the higher of fair value less costs to sell

and value in use. In assessing value in use, the estimated future

cash flows are discounted to their present value using a pre-tax

discount rate that reflects current market assessments of the

time value of money and the risks specific to the asset for which

the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit)

is estimated to be less than its carrying amount, the carrying

amount of the asset (cash-generating unit) is reduced to its

recoverable amount. An impairment loss is recognised in profit

or loss immediately.

Where an impairment loss subsequently reverses, the carrying

amount of the asset (cash-generating unit) is increased to the

revised estimate of its recoverable amount, but only to the extent

that the increased carrying amount does not exceed the carrying

amount that would have been determined had no impairment

loss been recognised for the asset (cash-generating unit) in prior

years. A reversal of an impairment loss is recognised in profit or

loss immediately.


(g) Inventories

Inventories are valued at the lower of cost and net realisable

value. Net realisable value represents the estimated selling price

less all estimated costs of completion and costs to be incurred in

marketing, selling and distribution.

(h) Financial Assets

Investments are recognised and derecognised on trade date

where purchase or sale of an investment is under a contract

whose terms require delivery of the investment within the

timeframe established by the market concerned, and are initially

recognised at cost, being the fair value of consideration given,

net of transaction costs.

Investments in subsidiaries are measured at cost.

Investment in associate is presented in note 1(m).

Investments and financial assets in the scope of AASB 139

Financial Instruments: Recognition and Measurement are

classified as either ‘financial assets at fair value through profit

and loss’, ‘held-to-maturity’ investments, and ‘loans and

receivables’. The classification depends on the nature and

purpose of the financial assets and is determined at the time

of initial recognition.

Financial assets at fair value through profit or loss

Financial assets classified as held for trading are included in

the category “financial assets at fair value through profit or

loss”. Financial assets are classified as held for trading if they

are acquired for the purpose of selling in the near term with the

intention of making a profit. At balance date these investments

are adjusted for market value through profit and loss accounts.

Held-to-maturity investments

Bills of exchange and debentures are recorded at amortised cost

using the effective interest method less impairment, with revenue

recognised on an effective yield basis.

The effective interest method is a method of calculating the

amortised cost of a financial asset and of allocating interest

income over the relevant period. The effective interest rate is

the rate that exactly discounts estimated future cash receipts

through the expected life of the financial asset, or, where

appropriate, a shorter period.

Loans and receivables

Trade receivables, which generally have 30-90 day terms

are recognised at fair value and subsequently measured at

amortised cost using the effective interest method, less an

allowance for any uncollectable amounts.



(i) Payables

Trade payables and other accounts payable are recognised

when the consolidated entity becomes obliged to make future

payments resulting from the purchase of goods and services.

(j) Leased Assets

Leases are classified as finance leases whenever the terms

of the lease transfer substantially all the risks and rewards

of ownership to the lessee. All other leases are classified as

operating leases.

(k) Provisions

Provisions are recognised when the consolidated entity has a

present obligation, the future sacrifice of economic benefits is

probable, and the amount of the provision can be measured

reliably.

The amount recognised as a provision is the best estimate of

the consideration required to settle the present obligation at

reporting date, taking into account the risks and uncertainties

surrounding the obligation. Where a provision is measured using

the cashflows estimated to settle the present obligation, its

carrying amount is the present value of those cashflows.

When some or all of the economic benefits required to settle a

provision are expected to be recovered from a third party, the

receivable is recognised as an asset if it is virtually certain that

recovery will be received and the amount of the receivable can

be measured reliably.

(l) Revenue recognition

Sale of goods and disposal of assets

Revenue from the sale of goods and disposal of other assets

is recognised when the consolidated entity has transferred to

the buyer the significant risks and rewards of ownership of

the goods.

Rendering of services

Revenue from a contract to provide services is recognised by

reference to the stage of completion of the contract.

Interest

Revenue is recognised (using the effective interest method,

which is the rate that exactly discounts estimated future cash

receipts through the expected life of the financial instrument)

to the net carrying amount of the financial asset as the

interest accrues.


2007 08

Dividends

Revenue is recognised when the company’s right to receive the

payment is established.

Commission income

Commission income is recognised when the right to receive

payment is established.

Subscriptions and recognition of contracts relating to

vehicle break-down services

Under A-IFRS, the accounting treatment for income and

expenditure relating to vehicle breakdown services is recognised

in accordance with AASB 4 Insurance Contracts.

The Company’s policy to comply with the requirements of

AASB 4 is to provide for unexpired subscriptions having regard

to the due dates of the subscriptions. This methodology has

been examined by the directors and the resulting financial

information presented complies with AASB 4.

(m) Investment in Associate

The Group’s investment in its associate is accounted for using

the equity method of accounting in the consolidated financial

statements. The Group has significant influence over the associate.

Under the equity method, the investment in the associate entity

is carried in the consolidated Statement of Financial Position at

cost plus post -acquisition changes in the group’s share of net

assets of the entity. Goodwill relating to the associate entity is

included in the carrying amount of the investment and is not

amortised. After application of the equity method, the Group

determines whether it is necessary to recognise any additional

impairment loss with respect to the Group’s net investment in

the associate entity. The consolidated Statement of Financial

Performance reflects the Group’s share of the results of the

operations of the associate entity.

Where there has been a change in the associate entity’s equity,

the Group recognises its share of any changes and discloses this

in the consolidated Statement of Financial Performance.

The reporting dates of the associate entity and the Group are

identical and the entity’s accounting policies conform to those

used by the Group for like transactions and events in similar

circumstances.

(n) Goodwill

Goodwill acquired in a business combination is initially measured

at cost being the excess of the cost of the business combination

over the Group’s interest in the fair value of the acquiree’s

identifiable assets, liabilities and contingent liabilities.

Following initial recognition, goodwill is measured at cost less

any accumulated impairment losses.

For the purpose of impairment testing, goodwill acquired in a

business combination is, from the acquistion date, allocated

to each of the Group’s cash-generating units, or groups of

cash-generating units, that are expected to benefit from the

synergies of the combination, irrespective of whether other

assets or liabilities of the Group are assigned to those units or

groups of units. Each unit or group of units to which goodwill is

so allocated:

- represents the lowest level within the Group at which goodwill

is monitored for internal management purposes; and

- is not larger than a segment based on either the Group’s

primary or the Group’s secondary reporting format determined

in accordance with AASB 114 Segment Reporting.

Impairment is determined by assessing the recoverable amount

of the cash-generating unit (group of cash-generating units),

to which the goodwill relates. When the recoverable amount of

the cash-generating unit (group of cash-generating units) is less

than the carrying amount, an impairment loss is recognised.

When goodwill forms part of a cash-generating unit (group

of cash-generating units) and an operation within that unit is

disposed of, the goodwill associated with the operation disposed

of is included in the carrying amount of the operation when

determing the gain or loss on disposal of the operation.

Goodwill disposed of in this manner is measured based on

the relative values of the operation disposed of and the portion

of the cash - generating unit retained.

Impairment losses recognised for goodwill are not subsequently

reversed.

(o) Employee benefits

Provision is made for benefits accruing to employees in respect

of wages and salaries, annual leave and long service leave

when it is probable that settlement will be required and they are

capable of being measured reliably.

Provisions made in respect of employee benefits expected to be

settled within 12 months, are measured at their nominal values

using the remuneration rate expected to apply at the time of

settlement.

Provisions made in respect of employee benefits which are not

expected to be settled within 12 months are measured at the

present value of the estimated future cash outflows to be made

by the consolidated entity in respect of services provided by

employees up to reporting date.




Defined contribution plans

Contributions to defined contribution superannuation plans are

expensed when incurred.

Defined benefit plans

For defined benefit superannuation plans, the cost of providing

benefits is determined using the Projected Unit Credit Method,

with actuarial calculations being carried out at each reporting

date. Actuarial gains and losses are recognised in full, directly

in retained earnings, in the period in which they occur, and are

presented in the Statement of Changes in Equity.

Past service cost is recognised immediately to the extent that

the benefits are already vested, otherwise is amortised on a

straight-line basis over the average period until the benefits

become vested.

The defined benefit obligation recognised in the Statement of

Financial Position represents the present value of the defined

benefit obligation, adjusted for unrecognised past service cost,

net of the fair value of the plan assets. Any asset resulting from this

calculation is limited to past service cost, plus the present value of

available refunds and reductions in future contributions to the plan.


2007 08

2. REVENUE CONSOLIDATED COMPANY

2008

$

2007

$

2008

$

2007

$

Revenueconsistedofthefollowingitems

(a) Revenue

Interest from other bodies corporate 190,333 339,079 65,124 25,896

Distributions from funds under management 434,493 1,859,426 - -

Rental revenue 39,570 35,718 39,570 35,718

Membership subscriptions and entrance fees 8,518,146 7,955,434 8,518,146 7,955,434

Other services and activities 12,416,930 11,952,559 12,446,930 11,982,559

Commission & other income 470,940 412,843 470,940 412,843

Realised gains/(loss) on investment (364,248) 94,452 - -

Dividends 258,270 - - -

21,964,434 22,649,511 21,540,710 20,412,450

(b) Share of profit of associate

Share of profit of associate 518,134 - - -

518,134 - - -

(c) Other Revenue

Gain/(loss)ondisposalofproperty,plantandequipment (21,601) 151,325 (21,601) 151,325

Unrealisedgain/(loss)oninvestments (971,269) 365,229 - -

(992,870) 516,554 (21,601) 151,325

21,489,698 23,166,065 21,519,109 20,563,775

Profit before income tax has been arrived at after charging

thefollowingexpensesandlossesfromoperations:

(d) Expenses

Depreciation and amortisation of non-current assets:

Plant&equipment 848,184 875,848 848,184 875,848

Buildings 57,822 64,017 57,822 64,017

Software 147,982 144,951 147,982 144,951

1,053,988 1,084,816 1,053,988 1,084,816

Baddebtswrittenoff 6,196 2,119 6,196 2,119

Transfer to provisions for:

Employee benefits 193,536 111,291 193,536 111,291

Unexpired subscriptions 317,007 385,517 317,007 385,517

510,543 496,808 510,543 496,808




3. INCOME TAX EXPENSE CONSOLIDATED COMPANY

2008

$

2007

$

2008

$

2007

$

(a) Income Tax Expense

The components of tax expense comprise:

Current Tax 358,215 642,882 (12,833) -

Deferred Tax (471,093) (106,240) (63,760) (251,690)

Under/(over) provision from previous years (68,657) 103,219 (4,292) 102,833

(181,535) 639,861 (80,885) (148,857)

(b) Numerical reconciliation of income tax expense to

prima facie tax payable

Prima facie tax on profit/(loss) before income tax at 30%

(2007:30%) 377,699 1,114,159 393,895 345,250

Add tax effect of:

Non assessable income (1,202) (73,684) - (68,183)

Mutual profits (358,475) (142,868) (358,475) (142,868)

Non mutual deductions (132,566) (159,062) (132,566) (159,062)

Non deductable expenses 20,514 13,487 20,514 11,963

Tax Credits (28,040) - - -

Other - (112,171) - (135,957)

Under/(over) provision from previous years (59,465) - (4,252) -

Total (181,535) 639,861 (80,885) (148,857)

(c) Deferred tax recognised directly to equity

Relating to revaluation of property - (188,120) - (188,120)

Relating to defined benefits (46,972) (65,104) (46,972) (65,104)

(46,972) (253,224) (46,972) (253,224)

(d) Current and Deferred tax balances

Assets

Current/Non-current

Current tax receivable 145,434 - 145,434 -

Deferred tax assets 221,157 106,757 221,157 98,898

TOTAL 366,591 106,757 366,591 98,898

Liabilities

Current/Non-current

Current tax liability - 562,262 - 562,262

Deferred tax liability 642,473 1,046,136 476,821 465,294

TOTAL 642,473 1,608,398 476,821 1,027,556


2007 08

3. INCOME TAX EXPENSE (continued)Taxable and deductible temporary differences arise from the following:

2008

Consolidated

Opening balance

Credited/(charged) to income

Credited/ (charged) to equity

Closing balance

$ $ $ $

Gross deferred tax liabilities:

Property,plant & equipment (158,613) (230,905) - (389,518)

Accrued income - (5,654) - (5,654)

Prepayments - (27,872) - (27,872)

Investment in associate - (155,441) - (155,441)

Defined benefit funds - (106,402) 46,972 (59,430)

Investments (887,523) 882,965 - (4,558)

(1,046,136) 356,691 46,972 (642,473)

Gross deferred tax assets:

Receivables 3,675 825 - 4,500

Property, plant & equipment (285,724) 285,724 - -

Provisions 92,864 121,277 - 214,141

Investments 306,677 (306,677) - -

Tax losses (20,953) 20,953 - -

Other 10,218 (7,702) - 2,516

106,757 114,400 - 221,157

(939,379) 471,093 46,972 (421,314)

2007

Consolidated

Opening balance



Closing balance

$ $ $ $


Property, plant & equipment (383,157) 412,664 (188,120) (158,613)

Investments (790,853) (96,670) - (887,523)

(1,174,010) 315,994 (188,120) (1,046,136)


Receivables 3,675 - - 3,675

Property, plant & equipment 4,088 (289,812) - (285,724)

Provisions 65,916 103,553 (76,605) 92,864

Investments 306,677 - - 306,677

Tax losses - - (20,953) (20,953)

Other 1,258 8,960 - 10,218

381,614 (177,299) (97,558) 106,757

(792,396) 138,695 (285,678) (939,379)


3. INCOME TAX EXPENSE (continued)

2008

Company

Opening balance



Closing balance

$ $ $ $


Property, plant & equipment (444,341) 54,822 - (389,519)

Defined benefits fund - (106,402) 46,972 (59,430)

Prepayments (20,953) (6,919) - (27,872)

(465,294) (58,499) 46,972 (476,821)


Receivables 3,675 825 - 4,500

Provisions 92,864 121,277 - 214,141

Other 2,359 157 - 2,516

98,898 122,259 - 221,157

(366,396) 63,760 46,972 (255,664)

2007

Company

Opening balance



Closing balance

$ $ $ $


Property, plant & equipment (383,156) 126,935 (188,120) (444,341)

Prepayments - - (20,953) (20,953)

(383,156) 126,935 (209,073) (465,294)


Receivables 3,675 - - 3,675

Property, plant & equipment 4,088 (4,088) -

Provisions 65,916 92,052 (65,104) 92,864

Other 1,258 1,101 - 2,359

74,937 89,065 (65,104) 98,898

(308,219) 216,000 (274,177) (366,396)




2007 08

4. REMUNERATION OF AUDITORS CONSOLIDATED COMPANY

2008

$

2007

$

2008

$

2007

$

Audit of the financial report 23,600 22,700 23,600 22,700

Other non-audit services 8,403 7,175 8,403 7,175

32,003 29,875 32,003 29,875

5. RECEIVABLESTrade and Other Receivables

Trade receivables / sundry debtors 1,087,437 2,467,320 817,530 1,267,194

Allowance of impairment loss / doubtful debtors (a) (15,000) (15,000) (15,000) (15,000)

1,072,437 2,452,320 802,530 1,252,194

Related party receivables: (b)

Associates - (Receivable from RACT Insurance Pty Ltd

(unsecured)) 776,297 969,563 776,297 969,563

Carrying amount of trade and other receivables 1,848,734 3,421,883 1,578,827 2,221,757

(a) Allowance for impairment loss

Trade receivables are not interest bearing and are generally on

30-90 day terms. A provision for impairment loss is

recognised when there is objective evidence that an individual

trade receivable is impaired. An impairment loss of $15,000

(2007 - $15,000) has been recognised by the group and

$15,000 (2007 - $15,000) by the company in the current year.

Movement in the provision for impairment loss were as follows:

At 1 July 15,000 15,000 15,000 15,000

Charge for the year 6,196 2,119 6,196 2,119

Amounts written off (6,196) (2,119) (6,196) (2,119)

At 30 June 15,000 15,000 15,000 15,000




5. RECEIVABLES (continued)At 30 June, the ageing analysis of trade receivables is as follows:

Total 0-30 days 31-60 days 61-90 days

+ 91 days

PDNI*

+ 91 days

CI*

2008 Consolidated 1,087,437 456,701 93,542 33,453 488,741 15,000

Parent 817,530 186,795 93,542 33,453 488,741 15,000

2007 Consolidated 2,467,320 1,961,444 54,342 61,954 374,580 15,000

Parent 1,267,194 761,318 54,342 61,954 374,580 15,000

* Past due not impaired (PDNI*)

* Considered Impaired (CI*)

Receivables greater than 90 days include the consolidated entity’s direct debt control balance. This balance covers a continually

rolling 12 month direct debit period.

Receivables past due but not considered impaired are: Consolidated $488,741 (2007 $374,580); Parent $488,741 (2007

$374,580).

Payment terms on these amounts have not been re-negotiated, each operating unit has been in direct contact with the relevant

debtor and is satisfied that payment will be received in full.

Other balances within trade and other receivables do not contain impaired assets and are not past due. It is expected that these

other balances will be received when due.

(b) Fair value and credit risk

Due to the short term nature of these receivables, their carrying value is assumed to approximate their fair value.

The maximum exposure to credit risk is the fair value of receivables. Collateral is not held as security, nor is it the Groups policy to

transfer (on-sell) receivables to special purpose entities.

6. OTHER FINANCIAL ASSETS CONSOLIDATED COMPANY

2008

$

2007

$

2008

$

2007

$

(a) Current

Loan to controlled entities (unsecured) (i) - - 16,511,153 15,128,243

Term Deposits (ii) 2,000,000 3,300,000 - -

(i) Loans to controlled entities are interest free and repayable

at call. 2,000,000 3,300,000 16,511,153 15,128,243

(b) Non-current

Shares in controlled entities (at cost) - - 10,001 10,001

Unit trusts (ii) 3,684,832 14,162,501 - -

Floating Rate Notes (ii) 500,000 3,000,000 - -

Equities (ii) 434,803 459,803 - -

4,619,635 17,622,304 10,001 10,001

(ii) Designated as a financial asset at fair value through profit and

loss from 1 July 2004.


2007 08

7. INVESTMENT IN ASSOCIATE CONSOLIDATED

2008

$

2007

$

RACT Holdings Pty Ltd has held shares as part of a joint venture

in RACT Insurance Pty Ltd since 1 September 2007 RACT

Insurance Pty Ltd is incorporated in Australia and provides

general insurance products that are distributed by The Royal

Automobile Club of Tasmania Ltd.

(a) Investment details:

RACT Insurance Pty Ltd 14,961,341 -

Investments in associate 14,961,341 -

(b) Movements in the carrying amount of the Group’s

investment in associates

At 1 September 2007 14,443,207 -

Share of profits 518,134 -

At 30 June 2008 14,961,341 -

(c) Summarised financial information:

The following table illustrates summarised financial information

relating to the Group’s associates:

Extract from the associates’ balance sheets:

Current assets 33,113,049 -

Non-current assets 24,067,186 -

57,180,235 -

Current liabilities 44,456,954 -

Non-current liabilities (63,219) -

44,393,735 -

Net assets 12,786,500 -

(d) Extract from Associates Income Statement

Revenue 49,100,522 -

Net Profit 2,208,083 -


8. INTANGIBLES CONSOLIDATED COMPANY

2008

$

2007

$

2008

$

2007

$

(a) Goodwill on travel business 1,170,169 1,130,169 1,170,169 1,130,169

1,170,169 1,130,169 1,170,169 1,130,169

(b) Computer software:

Opening balance 455,321 307,596 455,321 307,596

Additions - 126,106 - 126,106

Transfers - 166,570 - 166,570

Amortisation expense (147,982) (144,951) (147,982) (144,951)

Closing balance 307,339 455,321 307,339 455,321

1,477,508 1,585,490 1,477,508 1,585,490

9. INVENTORIESAt cost

Finished goods 127,237 133,051 127,237 133,051

127,237 133,051 127,237 133,051

10. OTHER ASSETS(a) Current

Prepayments 236,784 241,943 236,784 241,943

Accrued revenue 34,355 37,321 34,355 37,321

271,139 279,264 271,139 279,264

(b) Non-current

Net asset arising from defined benefit obligations 198,101 399,666 198,101 399,666

198,101 399,666 198,101 399,666




2007 08

11. PROPERTY, PLANT AND EQUIPMENT Consolidated 2008

Freehold

Land

(fair value)

$

Buildings

( fair value)

$

Plant and

Equipment

(cost)

$

TOTAL

$

Gross Carrying Amount

Balance at 30 June 2007 2,462,055 2,473,641 9,670,500 14,606,196

Additions - 117,323 1,211,914 1,329,237

Disposals - (98,498) (402,868) (501,366)

Balance at 30 June 2008 2,462,055 2,492,466 10,479,546 15,434,067

Accumulated Depreciation

Balance at 30 June 2007 - 138,460 7,039,596 7,178,056

Disposals - - (311,318) (311,318)

Depreciation expense - 57,822 848,184 906,006

Balance at 30 June 2008 - 196,282 7,576,462 7,772,744

Net Book Value

As at 1 July 2007 2,462,055 2,473,641 9,670,500 14,606,196

Accumulated depreciation - (138,460) (7,039,596) (7,178,056)

Net carrying amount 2,462,055 2,335,181 2,630,904 7,428,140

As at 30 June 2008

Cost / fair value 2,462,055 2,492,466 10,479,546 15,434,067




11. PROPERTY, PLANT AND EQUIPMENT Company 2008

(continued) Freehold

Land

(fair value)

$

Buildings

( fair value)

$

Plant and

Equipment

(cost)

$

TOTAL

$


Balance at 30 June 2007 2,462,055 2,473,641 9,670,500 14,606,196

Additions - - 1,211,914 1,211,914

Disposals - (98,498) (402,868) (501,366)

Balance at 30 June 2008 2,462,055 2,375,143 10,479,546 15,316,744


Balance at 30 June 2007 - 138,460 7,039,596 7,178,056

Disposals - - (311,318) (311,318)


Balance at 30 June 2008 - 196,282 7,576,462 7,772,744

Net Book Value

As at 1 July 2007 2,462,055 2,473,641 9,670,500 14,606,196



As at 30 June 2008

Cost / fair value 2,462,055 2,375,143 10,479,546 15,316,744

Accumulated depreciation 0 (196,282) (7,576,462) (7,772,744)





2007 08

11. PROPERTY, PLANT AND EQUIPMENT Consolidated & Company 2007

(continued) Freehold

Land

(fair value)

$

Buildings

( fair value)

$

Plant and

Equipment

(cost)

$

TOTAL

$


Balance at 30 June 2006 1,590,000 2,434,553 8,954,209 12,978,762

Additions - 119,273 983,030 1,102,303

Disposals (150,450) (160,395) (99,989) (410,834)

Transfers - - (166,750) (166,750)

Revaluation Land and Buildings 1,102,505 80,210 - 1,182,715

Transfer of Realised Gain (80,000) - - (80,000)

Balance at 30 June 2007 2,462,055 2,473,641 9,670,500 14,606,196


Balance at 30 June 2006 - 108,811 6,257,205 6,366,016

Disposals - (34,368) (93,457) (127,825)


Balance at 30 June 2007 - 138,460 7,039,596 7,178,056

Net Book Value

As at 1 July 2006 1,590,000 2,434,553 8,954,209 12,978,762



As at 30 June 2007 2,462,055 2,473,641 9,670,500 14,606,196



12. PAYABLES CONSOLIDATED COMPANY

2008

$

2007

$

2008

$

2007

$

Sundry creditors and accrued expenses 2,517,797 2,539,222 2,476,739 2,538,391

GST payable 231,580 268,352 235,112 270,617

2,749,377 2,807,574 2,711,851 2,809,008




13. PROVISIONS (CURRENT) CONSOLIDATED COMPANY

2008

$

2007

$

2008

$

2007

$

Unexpired subscriptions 4,582,492 4,265,481 4,582,492 4,265,481

Employee benefits 800,228 817,239 800,228 817,239

5,382,720 5,082,720 5,382,720 5,082,720

14. PROVISIONS (NON-CURRENT)Employee benefits 313,464 263,440 313,464 263,440

313,464 263,440 313,464 263,440

The provisions disclosed in notes 13 & 14 represent the following:

(a) The provision for unexpired subscriptions represents the unearned portion of amounts for Roadside membership.

(b) The provision for employee benefits represents amounts for annual leave and long service leave benefits.

15. OWNERSHIPThe Company is incorporated under the Corporations Act 2001 as a company limited by the guarantee of the members. If the

company is wound up, its Constitution states that each member is required to contribute a maximum of $6.30 towards any

outstanding obligations of the company. As at 30 June 2008, the number of members was 108,918 (2007 - 106,600).

16. RELATED PARTY DISCLOSURES(a) Transactions between directors and director-related entities are on normal commercial terms and conditions no more

favourable than those available to other parties unless otherwise stated.

The directors may obtain discounted services from the consolidated entity. These services are obtained on the same terms and

conditions as those obtained by employees of the consolidated entity.

(b) Shadforths Ltd, of which Mr D Catchpole, a Director of the company, is the Chairman - Board of Advice, currently manages the

RACT Pty Ltd growth investment portfolio. All transactions between the two entities are undertaken on a normal commercial basis.

(c) Butler McIntyre & Butler, of which Mr P Joyce, a Director of the company, is a Partner, provides legal advice to the RACT group

as and when required. All transactions between the two entities are undertaken on a normal commercial basis.


2008

$

2007

$

2008

$

2007

$

(d) Loan to RACT Pty Ltd - - 16,511,153 15,128,243

The loan is secured over the assets of RACT Pty Ltd and does

not attract interest.

(e) The names of directors who have held office during the financial year are:

Ms J M Archer Mr P A Dixon Mr R S Locke

Mr E C Best, AM, JP Mr R H Holmes Mr S E Slade

Mr J R Bloomfield JP Mr P J Joyce Mr A C Stacey AM

Mr D M Catchpole Mr C J Langdon Mrs K A Westwood

Mr B F Clark

(f) The Royal Automobile Club of Tasmania Limited is the ultimate parent entity.


2007 08

17. KEY MANAGEMENT PERSONNEL CONSOLIDATED COMPANY

COMPENSATION 2008

$

2007

$

2008

$

2007

$

The aggregate compensation of the key management personnel

of the consolidated entity and the company is set out below:

(a) Total remuneration for Directors: 111,308 64,409 111,308 64,409

(b) The number of directors of the consolidated entity whose remuneration (including superannuation contributions)

fell within the following bands are:

$0 - $9,999 8 11 8 11

$10,000 - $19,999 5 1 5 1

13 12 13 12

(c) Remuneration for key management personnel as listed:

(a) Short term employee benefits 1,517,114 1,468,890 1,517,114 1,468,890

1,517,114 1,468,890 1,517,114 1,468,890

Key management personnel:

Mr G Goodman - Group Chief Executive Mr H Lennon - Chief Operating Officer Mr I Kelly - Chief Information Officer Mr C Petterwood - General Manager Sales & Distribution Ms L Shephard - Human Resources Manager Ms R Sinfield - General Manager Travel Ms J Dew - Financial Controller

Mr D Moody - General Manager, Roadside & Technical Services (from 11 Dec 07) Mr V Taskunas - Public Policy and Communications (from 21 Jan 08) Mr D Ling - Chief Engineer (until 30 Nov 07) Mr D Rose - Group Manager, Marketing & Communications (until 14 Sep 07)

18. DETAILS OF CONTROLLED ENTITIESThe following entities constitute The Royal Automobile Club of Tasmania Limited Group:

PERCENTAGEOFSHARESHELD

2008 2007

Parent entity

The Royal Automobile Club of Tasmania Limited (i) - -

Controlled entities

RACT Pty Ltd (ii) 100 100

RACT Holdings Pty Ltd (ii) 100 100

RACT Holdings Pty Ltd is 50% owned by RACT Pty Ltd and 50% owned by The Royal Automobile Club of Tasmania Limited. The

shares in the Financial Statements of RACT Pty Ltd and The Royal Automobile Club of Tasmania Limited are recorded at $1.00 each.

All companies are incorporated in Australia.

(i) The Royal Automobile Club of Tasmania Limited is the head entity within the tax consolidated group.

(ii) These companies are members of the tax consolidated group.


19. SEGMENT INFORMATIONThe consolidated entity exists primarily to provide services to members. It operates in two industry sectors, the operations for each

being summarised in the following table:

External Sales Inter-segment Total

Segment Revenues

2008

$’000

2007

$’000

2008

$’000

2007

$’000

2008

$’000

2007

$’000

Member services 17,498 16,712 - - 17,498 16,712

Travel 3,908 3,608 106 90 4,014 3,698

Total of all Segments 21,512 20,410

Eliminations (106) (90)

Unallocated 83 2,846

Consolidated 21,489 23,166

Segment Results

Member services 1,896 1,796

Travel 19 (337)

Total of all Segments 1,915 1,459

Unallocated (656) 2,255

Profit before income tax 1,259 3,714

Income tax expense 182 (640)

Net Profit 1,441 3,074

Assets Liabilities

Segment Asset & Liabilities

2008

$’000

2007

$’000

2008

$’000

2007

$’000

Member services 27,422 26,044 7,725 7,612

Travel 2,146 2,163 720 541

Total of all Segments 29,568 28,207 8,445 8,153

Eliminations - - - -

Unallocated 8,015 8,865 497 1,609

Consolidated 37,583 37,072 8,942 9,762

Member Services Travel

Other Segment Information

2008

$’000

2007

$’000

2008

$’000

2007

$’000

Acquisition of segment assets 1,329 1,160 - 70

Depreciation and amortisation of segment assets 1,006 1,042 48 42

Other non-cash expenses 150 72 43 39

The consolidated entity operates in the single geographic area of Tasmania.

For management purposes, the consolidated entity is organised into two operating divisions - Membership and Travel. The principal

products and services of each of these divisions are as follows:

Membership Services provided to members such as roadside help and vehicle inspection.

Travel Domestic and international travel services for customers.




2007 08

20. Defined Benefit Superannuation PlansThe consolidated entity provides defined benefit superannuation

arrangements for employees who elected to take this option

prior to 30 June 1997 when the arrangements were closed to

new members. Under the defined benefit arrangements, the

employees are entitled to retirement benefits varying between

15% and 20% of final average salary for each year of service.

The consolidated entity contributes to defined contribution plans

for other employees.

Up to 30 June 2003, the consolidated entity participated in a

stand-alone employer-sponsored fund which provided benefits

to employees of entities in the Consolidated RACT Group on

retirement, death or disability. On 30 June 2003, all assets and

liabilities of the stand-alone fund were transferred to the Quadrant

Superannuation Scheme which is a multi-employer superannuation

fund under the trusteeship of Quadrant Superannuation Pty

Ltd. The transfer was effected on a successor fund basis with

the defined benefit component being established as a sub-

fund of the Quadrant Superannuation Scheme (the RACT Staff

Superannuation Scheme Benefits Fund). However, there remains

a legally enforceable obligation on the company to make up any

deficiency in the sub-fund.

The defined benefit sub-fund is a funded plan. Quadrant

Superannuation Pty Ltd computes its obligations in respect of

the sub-fund in accordance with Accounting Standard AAS 25

Financial Reporting by Superannuation Plans which prescribes

a different measurement basis to that applied in this financial

report. The net surplus of assets over members’ vested benefits

as determined in the Scheme’s most recent financial report as

at 30 June 2007 was $426,000 (2006: $264,000). The

most recent actuarial investigation into the sub-fund was carried

out as at 30 June 2005 by David Quinn-Watson BSc(Hons)

FIAA of Bendzulla Actuarial Pty Ltd. The next actuarial review

is due as at 30 June 2008, and is expected to be completed

early in 2009. The actuary has not recommended that

employer contributions beyond the current contribution level

be made. Funding recommendations are made by the actuary

based on a target funding approach referencing the members’

vested benefits.

The consolidated entity has a legal liability to make up a deficit

in the sub-fund but no legal right to use any surplus in the sub-

fund to further its own interests.

CONSOLIDATED

2008

$

2007

$

Key assumptions used (expressed as weighted averages):

Discount rate gross of tax 6.50% 6.25%

Discount rate net of tax 5.50% 5.30%

Expected return on plan assets 6.35% 6.35%

Expected rate(s) of salary increase 4.00% 4.00%

Expected return on reimbursement rights

equal to

discount rate

equal to

discount rate

Tax on employer contributions 15% 15%


20. DEFINED BENEFIT SUPERANNUATION CONSOLIDATED COMPANY

PLANS (continued) 2008

$

2007

$

2008

$

2007

$

Amounts recognised in income in respect of these defined benefit plans are as follows:

Current service cost 110,555 79,640 110,555 79,640

Interest cost 114,056 102,122 114,056 102,122

Expected return on plan assets (130,347) (146,504) (130,347) (146,504)

Total, included in superannuation expense/(income) 94,264 35,258 94,264 35,258

Actuarial losses/(gains) incurred during the year and recognised

in the Statement of Changes in Equity 156,574 (217,013) 156,574 (217,013)

The amount included in the Statement of Financial Position arising from the entity’s obligations in respect of its defined

benefit plans is as follows:

Present value of funded defined benefit obligations 1,161,818 2,272,889 1,161,818 2,272,889

Fair value of plan assets (1,359,919) (2,672,555) (1,359,919) (2,672,555)

Net liability/(asset) arising from defined benefit obligations (198,101) (399,666) (198,101) (399,666)

Included in the Statement of Financial Position:

Current provision for employee benefits (198,101) (399,666) (198,101) (399,666)

Defined benefit obligations (290) (370) (290) (370)

Net liability / (asset) arising from defined benefit obligations (198,391) (400,036) (198,391) (400,036)

Movements in the present value of the defined benefit obligations in the current period were as follows:

Opening defined benefit obligation 2,272,889 2,126,517 2,272,889 2,126,517

Current service cost 110,555 79,640 110,555 79,640

Interest cost 114,056 102,122 114,056 102,122

Contributions from plan participants 4,757 12,540 4,757 12,540

Actuarial losses/(gains) (46,712) (34,415) (46,712) (34,415)

Benefits paid (1,293,727) (13,515) (1,293,727) (13,515)

Closing defined benefit obligation 1,161,818 2,272,889 1,161,818 2,272,889

Movements in the present value of the plan assets in the current period were as follows:

Opening fair value of plan assets 2,672,555 2,270,832 2,672,555 2,270,832

Expected return on plan assets 130,347 146,504 130,347 146,504

Actuarial gains/(losses) (203,286) 182,598 (203,286) 182,598

Contributions from the employer 49,273 73,596 49,273 73,596

Contributions from plan participants 4,757 12,540 4,757 12,540

Benefits and tax paid (1,293,727) (13,515) (1,293,727) (13,515)

Closing fair value of plan assets 1,359,919 2,672,555 1,359,919 2,672,555




2007 08

20. DEFINED BENEFIT SUPERANNUATION PLANS (continued)The consolidated entity expects to continue to make contributions at the rate of 1.5 times employee contributions to the defined

benefit plan during the next financial year. The level of contribution has been determined based on actuarial advice.

The overall expected rate of return is a weighted average of the expected returns of the various categories of plan assets held.

Decisions regarding the allocation of funds to various classes of assets are made by the trustee, Quadrant Superannuation Pty Ltd. The

Directors’ assessment of the expected returns is based on actuarial advice as described above. For the year ending 30 June 2008, the

Actuary has assumed a rate of return of 6.35% pa net of tax, investment management expenses and the fund’s administration charges.


2008

$

2007

$

2008

$

2007

$

The history of experience adjustments is as follows:

Experience adjustments on plan liabilities 37,517 (2,849) 37,517 (2,849)

Experience adjustments on plan assets (203,286) 182,599 (203,286) 182,599

21. NOTES TO THE CASH FLOW STATEMENT(a) Reconciliation of Cash

For the purpose of this Cash Flow Statement, cash includes cash on hand and in banks, net of outstanding bank overdrafts.

Cash at the end of the financial year as shown in the Cash Flow Statement is reconciled to the related items in the Statement of

Financial Position:

Cash on hand 15,624 13,724 15,624 13,724

Cash at bank 3,944,870 2,691,710 865,6812 827,949

Bank overdraft - secured 236,818 90,104 236,818 90,104

4,197,312 2,795,538 1,118,124 931,777

(b) Financing Facilities

A bank overdraft facility secured over the freehold property of the company is maintained to meet short term cash requirements. The

facility was not drawn against as at the balance date and any reference to bank overdraft relates to cheques unpresented at that date.

Facility amount 150,000 200,000 150,000 200,000

(c) Reconciliation of Profit After Related Income Tax to Net Cash Flows From Operating Activities

Profit after related income tax 1,440,531 3,074,002 1,393,864 1,299,687

Non cash flows in operating profit

Depreciation 1,053,977 1,084,816 1,053,977 1,084,816

Net loss/(profit) on sale of property plant & equipment 21,600 (151,325) 21,600 (151,325)

Unrealised (gain)/loss on investments 453,134 (365,229) - -

Change in provision for unexpired subscriptions in advance 317,008 385,517 317,008 385,517

Realised (gain)/loss on investments 364,248 (94,453) - -


21. NOTES TO THE CASH FLOW STATEMENT CONSOLIDATED COMPANY

(continued) 2008

$

2007

$

2008

$

2007

$

Changes in assets and liabilities

Provision for employee entitlements 33,015 50,207 33,015 50,207

(Increase)/decrease in prepayments 449,665 (702,350) 449,665 (702,350)

(Increase)/decrease in receivables 816,799 (1,495,284) (113,418) (1,341,858)

(Increase)/decrease in stock 5,814 (31,174) 5,814 (31,174)

Increase/(decrease) in other assets 8,124 115,855 8,124 115,855

Increase/(decrease) in trade creditors 248,899 (303,674) 207,850 (303,460)

(Increase)/decrease in deferred tax assets (114,400) (23,961) (122,259) (23,961)

Increase/(decrease) in deferred tax liabilities (403,664) 562,262 11,527 562,262

Increase/(decrease) in tax effect entries taken directly to

equiity 46,972 (253,224) 46,972 (253,224)

Increase/(decrease) in tax payable (401,013) 870,854 (707,696) 82,138

(Increase)/decrease in provisions (225,343) 337,312 (224,510) 337,312

Increase/(decrease) in GST payable (36,758) 53,558 (35,504) 53,558

Cash flows from operations 4,078,608 3,113,709 2,346,030 1,164,000

22. CAPITAL COMMITMENTSCapital expenditure commitments contracted for plant and equipment:

Payable not later than one year 17,100 162,660 17,100 162,660

23. OPERATING LEASE COMMITMENTS Due not later than one year 267,017 247,424 267,017 247,424

Due later than one but not later than two years 255,145 250,875 255,145 250,875

Due later than two but not later than five years 366,395 412,478 366,395 412,478

Due later than five years 87,822 - 87,822 -

Operating lease commitments relate to shop front leases with lease terms between three to six years.

24. EMPLOYEE BENEFITSThe aggregate employee benefits liability recognised and included in the financial statements is as follows:

Provision for Employee benefits

Current 800,228 817,239 800,228 817,239

Non-current 313,464 263,440 313,464 263,440

1,113,692 1,080,679 1,113,692 1,080,679

Salaries Paid in advance 88,671 104,003 88,671 104,003




2007 08

24. EMPLOYEE BENEFITS (continued) CONSOLIDATED COMPANY

2008

$

2007

$

2008

$

2007

$

Details of change in provision for employee benefits

Balance at 1 July - beginning 1,080,679 1,030,472 1,080,679 1,030,472

Net movement in provisions 33,013 50,206 33,013 50,206

Balance at 30 June - ending 1,113,692 1,080,678 1,113,692 1,080,678

2008 2007 2008 2007

Number of employees at end of financial year 172 175 172 175

25. FINANCIAL CONSOLIDATED

INSTRUMENTS 2008

Fixed Interest Rate Maturity

Average

Interest

Rate

%

Variable

Interest

Rate

$

Less than

1 Year

$

1 to 5

Years

$

More than

5 Years

$

Non-

Interest

Bearing

$

Total

$

Financial Assets

Cash 6.57 3,079,188 - - - 15,624 3,094,812

Trade receivables - - - - - 1,087,437 1,087,437

RACT Insurance receivable - - - - - 776,297 776,297

Accrued revenue - - - - - 34,355 34,355

Floating rate notes 9.18 500,000 - - - - 500,000

Commercial Bill Fixed Term

Deposit 7.64

1,000,000 - - - -

1,000,000

Commercial Bill Security Deposit 7.64 1,000,000 - - - - 1,000,000

Unit Trusts - - - - - 3,684,832 3,684,832

Equities - - - - - 34,804 34,804

Club Consortium - - - - 400,000 400,000

- 5,576,680 - - - 6,033,349 11,612,537

Financial Liabilities

Trade payables - - - - - 2,517,797 2,517,797

Bank overdraft* - - - - - (236,818) (236,818)

GST payable - - - - - 231,580 231,580

Employee benefits - - - - - 1,113,692 1,113,692

Deferred subscriptions - - - - - 4,582,492 4,582,492

- - - - - 8,208,743 8,208,743

*No interest was incurred on the bank overdraft as it represents unpresented cheques


25. FINANCIAL CONSOLIDATED

INSTRUMENTS 2007

(continued) Fixed Interest Rate Maturity

Average

Interest

Rate

%

Variable

Interest

Rate

$

Less than

1 Year

$

1 to 5

Years

$

More than

5 Years

$

Non-

Interest

Bearing

$

Total

$

Financial Assets

Cash 3.75 1,863,761 - - - 13,724 1,877,485

Trade receivables - - - - - 2,467,320 2,467,320

RACT Insurance receivable - - - - - 969,563 969,563

Accrued revenue - - - - - 37,321 37,321

Floating rate notes 7.59 3,000,000 - - - - 3,000,000

Term Deposits 6.26 3,300,000 - - - - 3,300,000

Unit Trusts - - - - - 14,082,783 14,082,783

Equities - - - - - 34,804 34,804

Club Consortium - - - - - 425,000 425,000

- 8,163,761 - - - 18,030,515 26,194,276


Trade payables - - - - - 2,539,222 2,539,222

Bank overdraft* - - - - - (90,104) (90,104)

GST payable - - - - - 268,352 268,352

Employee benefits - - - - - 1,080,678 1,080,678

Deferred subscriptions - - - - - 4,265,481 4,265,481

- - - - - 8,063,629 8,063,629

*No interest was incurred on the bank overdraft as it represents unpresented cheques

Financial risk management objectives and policies

The Group’s principal financial instruments comprise receivables, payables, bank overdrafts, shares, cash, short-term deposits

and investments.

The Group manages its exposure to key financial risks, including interest rate risk in accordance with the Group’s financial risk

management policy. The objective of the policy is to support the delivery of the Group’s financial targets whilst protecting future

financial security. The main risks arising from the Group’s financial instruments are interest rate risk, price risk, credit risk and

liquidity risk.The Group uses different methods to measure and manage different types of risks to which it is exposed. These include

monitoring levels of exposure to interest rate risk and assessments of market forcasts for interest rate and commodity prices.

Ageing analyses and monitoring of specific credit allowances are undertaken to manage credit risk, liquidity risk is monitored

through the development of future rolling cash flow forecasts.

The Board reviews and agrees policies for managing each of these risks as summarised below.




2007 08

25. FINANCIAL INSTRUMENTS (continued)Primary responsibility for identification and control of financial risks rests with the Investment Committee under the authority of the

Board. The Board reviews and agrees policies for managing each of the risks identified below including interest rate risk, credit

allowances, and future cash flow forecast projections.

Risk Exposures and Responses

Interest rate risk

The Group’s exposure to market interest rates relates primarily to the Group’s short-term investments.

At balance date, the Group had the following mix of financial assets and liabilities exposed to Australian variable interest rate risk

that are not designated in cash flow hedges.


2008

$

2007

$

2008

$

2007

$

Financial Assets

Loans - - 16,511,153 15,128,243

Cash and cash equivalents 4,197,312 2,795,538 1,118,124 931,777

4,197,312 2,795,538 17,629,277 16,060,020


Bank Overdrafts - - - -

Bank Loans - - - -

Loans to controlled entities - - - -

- - - -

Net exposure 4,197,312 2,795,538 17,629,277 16,060,020

The Group constantly analyses its interest rate exposure. Within the analysis consideration is given to potential renewals

of existing positions, alternative financing and the mix of fixed and variable interest rates.

The following sensitivity analysis is based on the interest rate risk exposures in existence at the balance sheet date.

At 30 June 2008, if interest rates had moved, as illustrated in the table below, with all other variables held constant,

post tax proift and equity would have been affected as follows:

Judgements of reasonably possible movements:

Post Tax Profit

Higher/Lower

Equity

Higher/Lower

2008

$

2007

$

2008

$

2007

$

Consolidated

+ 1% (100 basis points) 39,289 20,165 39,289 20,165

- .5% (50 basis points) (18,106) (10,082) (18,106) (10,082)

Company

+ 1% (100 basis points) 6,943 3,078 6,943 3,078

- .5% (50 basis points) (3,471) (1,539) (3,471) (1,539)

The movements in profit are due to higher/lower interest from variable rate cash balances.




25. FINANCIAL INSTRUMENTS (continued)

Price Risk

Price risk arises from investments in equity and property based securities. To limit this risk the Group diversifies its portfolio in

accordance with limits set by the Board’s Investment Policy. The portfolio consists of investment in Australian and international

equities, property trusts and funds under management.

The price risk for both listed and unlisted securities is material in terms of a possible impact on profit and loss or total equity and as

such a sensitivity analysis is presented below.

Units Held Percentage

Movement

Post Tax Profit

Higher/Lower

Equity

Higher/Lower

2008 2007 % 2008 2007 2008 2007

$ $ $ $

Consolidated

Equity Investments 946,052 1,839,507 +10% 94,605 183,951 94,605 183,951

(10%) (94,605) (183,951) (94,605) (183,951)

Property trusts - 285,856 +10% - 28,586 - 28,586

(10%) - (28,586) - (28,586)

Unit trusts 1,899,335 6,028,636 +10% 50,385 602,864 50,385 602,864

(10%) (50,385) (602,864) (50,385) (602,864)

Credit Risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the company, it

arises from the financial assets of the Group which comprise cash and cash equivalents, trade and other receivables. The company

has the policy of only dealing with creditworthy counterparties.

Therefore the consolidated entity does not have any significant credit risk exposure to any single counterparty or any group of

counterparties having similar characteristics.

The Group’s exposure to credit risk arises from potential default of the counter party, with a maximum exposure equal to the

carrying amount of these instruments. Exposure at balance date is addressed in each applicable note.

The Group does not hold any credit derivatives to offset its credit exposure.

It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures including an

assessment of their independent credit rating, financial position, past experience and industry reputation. Risk limits are set for each

individual customer in accordance with parameters set by the Board. These risk limits are regulary monitored.

In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is

not significant.

There are no significant concentrations of credit risk within the Group and financial instruments are spread amongst a number of

financial institutions to minimise the risk of default of counterparties.

Liquidity Risk

The Group’s objectives are to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts

and committed available credit lines.

The table below reflects all receivables for settlement, repayments and interest resulting from recognised financial assets and

liabilities as of 30 June 2008. For all obligations the respective undiscounted cash flows for the respective upcoming fiscal years

are presented. Cash flows for financial assets and liabilities without fixed amount or timing are based on the conditions exisiting at

30 June 2008.


2007 08

25. FINANCIAL INSTRUMENTS (continued)The remaining contractual maturities of the Group and Company financial liabilities are:


2008

$

2007

$

2008

$

2007

$

6 months or less 2,517,797 2,539,222 2,476,739 2,538,391

6-12 month - - - -

1-5 years - - - -

Over 5 years - - - -

2,517,797 2,539,222 2,476,739 2,538,391

Maturity analysis of financial assets and liability based on management’s expectation.

The risk implied from the values shown in the table below, reflects a balanced view of cash inflows and outflows. Leasing

obligations, trade payables and other financial liabilities mainly originate from the financing of assets used in our ongoing operations

such as property, plant and equipment, and investments in working capital eg inventories and trade receivables. These assets are

considered in the Group’s overall liquidity risk. To monitor existing financial assets and liabilities as well as to enable an effective

controlling of future risks, the Group has established comprehensive risk reporting covering its business units that reflects

expectations of management of expected settlement of financial assets and liabilties.

Year ended 30 June 2008 <6months 6-12months 1-5years >5years Total

$ $ $ $ $

Consolidated Financial Assets

Cash & cash equivalents 4,197,312 - - - 4,197,312

Trade & other receivables 1,087,437 - - - 1,087,437

5,284,749 - - - 5,284,749

Consolidated Financial Liabilities

Trade & other payables 2,517,797 - - - 2,517,797

2,517,797 - - - 2,517,797

Net maturity 2,766,952 - - - 2,766,952




25. FINANCIAL INSTRUMENTS (continued)

Year ended 30 June 2007 <6months 6-12months 1-5years >5years Total

$ $ $ $ $

Consolidated Financial Assets

Cash & cash equivalents 2,795,538 - - - 2,795,538

Trade & other receivables 2,467,320 - - - 2,467,320

5,262,858 - - - 5,262,858

Consolidated Financial Liabilities

Trade & other payables 2,539,222 - - - 2,539,222

Net maturity 2,723,636 - - - 2,723,636

The Group monitors rolling forecasts of liquidity reserves on the basis of expected cash flow. Forecast liquidity reserves as at

30 June 2008 is as follows:

2009 2010-2011

$ $

Opening balance for the period 4,197,312 4,447,864

Operating inflows 22,000,926 50,984,000

Operating outflows (19,255,600) (42,744,000)

Cash outflows for investments (2,504,774) (7,257,000)

Investment proceeds 10,000 15,000

Closing balance for the period 4,447,864 5,445,864

Fair Value

The carrying amounts of cash, short term investments, trade receivables and trade payables approximate net fair value because

of their short maturity. Amounts receivable are carried at nominal amounts due, less any allowance for doubtful debts. Liabilities

are recognised for amounts to be paid in the future for goods and services received, whether or not billed to any member of the

consolidated entity. Trade accounts payable are normally settled within 30-60 days. The carrying value of the floating rate notes

and the fixed interest trust approximates fair value.

The methods for estimating fair value are outlined in the relevant notes to the financial statements.

26. SUBSEQUENT EVENTSThere are no matters or circumstances which have arisen since the end of the financial year which significantly affect, or may significantly

affect, the operations of the company, the results of those operations, or the state of affairs of the company in subsequent years.

27. ADDITIONAL COMPANY INFORMATIONThe Royal Automobile Club of Tasmania Limited is a public company, incorporated and operating in Australia.

Registered Office

Corner Murray and Patrick Streets

HOBART TAS 7000

Tel: (03) 6232 6300

Principal Place of Business

Corner Murray and Patrick Streets

HOBART TAS 7000

Tel: (03) 6232 6300


2007 08

DIRECTORS’ DECLARATIONThe Directors declare that:

a) in the director’s opinion, there are reasonable grounds to believe that the company will be able to pay its

debts as and when they become due and payable;

b) in the directors opinion the attached financial statements and notes thereto are in accordance with

Corporations Act 2001, including compliance with accounting standards and giving a true and fair view

of the financial position and performance of the company and the consolidated entity

Signed for and on behalf of the Board of Directors and in accordance with a resolution of the Board, made pursuant

to s.295(5) of the Corporations Act 2001.

R S LOCKE

DIRECTOR

C J LANGDON

DIRECTOR

Launceston, 23 September 2008

Directors’ Declaration


1st floor 160 Collins Street Hobart 7000, PO Box 1083 Hobart TAS 7001 Tel: (03) 6223 6155 Fax: (03) 6223 8993 Email: [email protected] Internet: www.wlf.com.au

Partners: Peter Beven, Harvey Gibson, Danny McCarthy,

Douglas Thomson, Joanne Doyle, Stuart Clutterbuck, Ian Wheeler Managers: Shenna Hurd, Marg Marshall, Sharon Breen, Dean Johnson,

Alicia Leis, Melanie Richardson, Nick Carter, Paul Lyons, Kane Ingham, Kate Barnes

Consultants: Brent Palfreyman, Robert Whitehouse

Independent auditor’s report to the members of The Royal Automobile Club of Tasmania Ltd We have audited the accompanying financial report of The Royal Automobile Club of Tasmania Ltd, which comprises the balance sheet as at 30 June 2008, and the income statement, statement of changes in equity and cash flow statement for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ Responsibility for the Financial Report The directors of the company are responsible for the preparation and fair presentation of the financial report in accordance with the Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 1, the directors also state that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards.

Auditor’s Responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, we consider internal controls relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.


Chartered Accountants

advice to advantage

Independent Auditor’s Report


2007 08

H J GIBSONPARTNERWISE LORD & FERGUSONDate: 23 September 2008

Independence In conducting our audit we have met the independence requirements of the Corporations Act 2001. We have given to the directors of the company a written Auditor’s Independence Declaration, a copy of which is included in the directors’ report. The Auditor’s Independence Declaration would have been expressed in the same terms if it had been given to the directors at the date this auditor’s report was signed. In addition to our audit of the financial report, we were engaged to undertake the services disclosed in the notes to the financial statements. The provision of these services has not impaired our independence. Auditor’s Opinion In our opinion: 1. The financial report of The Royal Automobile Club of Tasmania Ltd is in accordance with

the Corporations Act 2001, including: (i) giving a true and fair view of the financial position of The Royal Automobile Club

of Tasmania Ltd and the consolidated entity at 30 June 2008 and of their performance for the year ended on that date; and

(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001.

2. The financial report also complies with International Financial Reporting Standards as

disclosed in Note 1.

H J GIBSON PARTNER WISE LORD & FERGUSON Date: 23 September 2008

The Royal Automobile Club of Tasmania Limited Annual Report

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